Legislature(1995 - 1996)
02/06/1996 01:07 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE February 6, 1996 1:07 p.m. MEMBERS PRESENT Representative Ivan Ivan, Co-Chair Representative Alan Austerman, Co-Chair Representative Kim Elton Representative Al Vezey Representative Pete Kott Representative Irene Nicholia MEMBERS ABSENT Representative Jerry Mackie COMMITTEE CALENDAR HOUSE BILL NO. 409 "An Act combining parts of the Department of Commerce and Economic Development and parts of the Department of Community and Regional Affairs by transferring some of their duties to a new Department of Community and Economic Development; transferring some of the duties of the Department of Commerce and Economic Development and the Department of Community and Regional Affairs to other existing agencies; eliminating the Department of Commerce and Economic Development and the Department of Community and Regional Affairs; adjusting the membership of certain multi-member bodies to reflect the transfer of duties among departments and the elimination of departments; and providing for an effective date." - HEARD AND HELD * HOUSE BILL NO. 330 "An Act relating to the unincorporated community capital project matching grant program; and providing for an effective date." - PASSED OUT OF COMMITTEE (* First public hearing) PREVIOUS ACTION BILL: HB 409 SHORT TITLE: DEPT OF COMMUNITY & ECONOMIC DEVELOPMENT SPONSOR(S): REPRESENTATIVE(S) KELLY, Therriault, James, Kohring JRN-DATE JRN-DATE ACTION 01/11/96 2409 (H) READ THE FIRST TIME - REFERRAL(S) 01/11/96 2409 (H) CRA, FINANCE 01/16/96 2456 (H) COSPONSOR(S): KOHRING 02/01/96 (H) CRA AT 01:00 PM CAPITOL 124 02/01/96 (H) MINUTE(CRA) 02/03/96 (H) CRA AT 01:00 PM CAPITOL 124 02/03/96 (H) MINUTE(CRA) 02/06/96 (H) CRA AT 01:00 PM CAPITOL 124 BILL: HB 330 SHORT TITLE: UNINCORP COMMUNITY CAPITAL PROJ GRANTS SPONSOR(S): REPRESENTATIVE(S) MOSES JRN-DATE JRN-DATE ACTION 05/03/95 1814 (H) READ THE FIRST TIME - REFERRAL(S) 05/03/95 1814 (H) CRA, FINANCE 02/06/96 (H) CRA AT 01:00 PM CAPITOL 124 WITNESS REGISTER PETE KELLY, Representative Alaska State Legislature State Capitol Building, Room 513 Juneau, Alaska 99801 Telephone: (907) 465-2327 POSITION STATEMENT: As sponsor, answered questions on HB 409. WILSON L. CONDON, Commissioner Department of Revenue P.O. Box 110400 Juneau, Alaska 99811-0400 Telephone: (907) 465-2300 POSITION STATEMENT: Presented department's position and answered questions on HB 409. RICHARD S. CROSS, Deputy Commissioner Department of Education 801 West Tenth Street, Suite 200 Juneau, Alaska 99801-1894 Telephone: (907) 465-2800 POSITION STATEMENT: Presented department's position and answered questions on HB 409. KAREN PERDUE, Commissioner Department of Health and Social Services P.O. Box 110601 Juneau, Alaska 99811-0601 Telephone: (907) 465-3030 POSITION STATEMENT: Presented department's position and answered questions on HB 409. MYRA OLSEN Rural Alaska Community Action Program (RurAL CAP) P.O. Box 74 Egegik, Alaska 99579 Telephone: (907) 233-2424 POSITION STATEMENT: Testified on HB 409. LINDA HARRISON, Family Services Coordinator Tlingit and Haida Head Start Program; and Member, Alaska Head Start Association 320 West Willoughby Juneau, Alaska 99801 Telephone: (907) 586-1432 POSITION STATEMENT: Testified on HB 409. DWIGHT PERKINS, Special Assistant Office of the Commissioner Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Telephone: (907) 465-2700 POSITION STATEMENT: Presented department's position and answered questions on HB 409. ERNESTINE HANLON P.O. Box 358 Hoonah, Alaska 99829 Telephone: (907) 945-3624 POSITION STATEMENT: Opposed HB 409. CHESTER MIYASATO 405-B DeGroff Sitka, Alaska 99835 Telephone: (907) 747-1496 POSITION STATEMENT: Opposed HB 409. ANN VELARDI 16140 Old Glenn Highway, Number 1 Eagle River, Alaska 99577 Telephone: (907) 696-5281 POSITION STATEMENT: Opposed HB 409. DEANNA CAPTAIN Chairperson, Tanana Chiefs Head Start Policy Council P.O. Box 55 Ruby, Alaska 99768 Telephone: (907) 468-4429 POSITION STATEMENT: Testified on HB 409. CARL MOSES, Representative Alaska State Legislature State Capitol Building, Room 204 Juneau, Alaska 99801 Telephone: (907) 465-4451 POSITION STATEMENT: Presented sponsor statement and answered questions on HB 330. WALT WREDE, Manager Lake and Peninsula Borough P.O. Box 495 King Salmon, Alaska 99613 Telephone: (907) 246-3421 POSITION STATEMENT: Supported HB 330. DAN SALMON, Administrator Village of Igiugig P.O. Box 4008 Igiugig, Alaska 99613 Telephone: (907) 533-3211 POSITION STATEMENT: Supported Hb 330. ACTION NARRATIVE TAPE 96-9, SIDE A Number 0001 CO-CHAIR IVAN IVAN called the House Community and Regional Affairs Committee meeting to order at 1:07 p.m. Members present at the call to order were Representatives Ivan, Austerman, Vezey and Kott. Members absent were Representatives Elton, who joined the meeting at 1:08 p.m., Mackie and Nicholia. Co-Chair Ivan invited Representative Carl Moses to join the committee at the table. HB 409 - DEPT OF COMMUNITY & ECONOMIC DEVELOPMENT Number 0075 CO-CHAIR IVAN noted that the committee had received that day, from the Department of Administration, an analysis on how the department had calculated moving costs for personnel affected by HB 409. He informed the committee that testimony would be provided by several agencies and advocate groups affected by the legislation. He then invited Representative Kelly to comment on the bill. Number 0146 REPRESENTATIVE PETE KELLY, sponsor of HB 409, spoke briefly, noting that economic development was important for all of Alaska. He said HB 409 attempted to merge the functions of economic development, placing it under one roof for efficiency and to achieve cost savings. He advised the committee that he was there primarily to listen. Number 0206 CO-CHAIR IVAN noted that Jeff Bush, Deputy Commissioner of the Department of Commerce and Economic Development (DCED), was available to answer questions. Number 0235 WILSON L. CONDON, Commissioner, Department of Revenue ("Revenue"), urged that neither the Division of Banking, Securities and Corporations nor the Division of Insurance be moved from DCED to Revenue. In terms of managing the department, Revenue already had a full plate. The department's main mission was to raise revenue efficiently and effectively, he said, as well as to preserve, protect and enhance, through the Treasury Division, revenue raised. COMMISSIONER CONDON pointed out that Revenue had responsibility for numerous independent revenue-related corporations, including the Alaska Housing Finance Corporation, the Alaska Permanent Fund Corporation, the Municipal Bond Bank Authority and the Alaska Student Loan Corporation. Revenue's main responsibilities were revenue-raising and protection. Although the department was pleased to have its non-revenue divisions, the Child Support Enforcement Division and the Permanent Fund Dividend Division, adding more such divisions would compromise its ability to manage those primary responsibilities. Number 0364 COMMISSIONER CONDON explained that Revenue had a number of crucial projects on the front burner, which were being managed from the commissioner's office. These included continuing the department's project to revise oil and gas tax regulations, as well as initiating the revision of corporate income tax regulations. Commissioner Condon explained the department also needed to focus more than in previous years on tax policy questions, as they arose, relating to efforts to close the fiscal gap, both at the state and national levels. Number 0443 REPRESENTATIVE KIM ELTON noted Commissioner Condon's objection to moving the Division of Insurance and the Division of Banking, Securities and Corporations to the Department of Revenue. He asked how the commissioner viewed moving the Alaska Public Utilities Commission, as well as other functions from DCED, to the department. Number 0467 COMMISSIONER CONDON replied the same was true for those. However, the Division of Insurance and the Division of Banking, Securities and Corporations would more greatly affect Revenue's ability to manage its core functions. Number 0545 RICHARD S. CROSS, Deputy Commissioner, Department of Education (DOE), referred to Section 265 of HB 409, which amended the duties of DOE to include operation of the Head Start program, currently under the Department of Community and Regional Affairs (DCRA). Mr. Cross praised Head Start, saying when the history of families and children in the last half of the century was written, one of the greatest success stories would be the Head Start program and its positive affect on children and families. Simply, the program worked. People from all sides of the political spectrum recognized its effectiveness. It reached children early and involved not only their families, but all aspects of a child's needs. MR. CROSS noted that Head Start served 88 Alaska communities. He commented that some people in Head Start had greater confidence in the program because it was not located in DOE. He thought the tension between education and Head Start was healthy. He expressed that both he and Commissioner Holloway wanted the committee to realize the vital nature of Head Start. He emphasized that the program was extremely successful and well-placed in DCRA. Number 0695 REPRESENTATIVE AL VEZEY asked Mr. Cross why he thought Head Start had been proven effective. He suggested that data indicated Head Start functioned well as day care. However, he could not see the educational advantage down the street. Number 0723 MR. CROSS responded that extensive research was available because of Head Start's long-term existence. Although a report somewhere might suggest negative aspects, the research, on balance, was overwhelmingly supportive. Comparative studies of matched groups of children, including both those in Head Start and those similarly situated but not in the program, indicated success for Head Start children both from the educational viewpoint and the viewpoint of those children as citizens later in life. Overwhelmingly, the program received high marks. It was generally proven and accepted to be successful. REPRESENTATIVE VEZEY wondered why, if it was an education program, Head Start should not be placed in DOE. Number 0803 MR. CROSS replied that having every program affecting a child in the same agency might not be good. He suggested that people receiving the benefit of Head Start could probably answer that question best. Mr. Cross noted that public education was a K-12 endeavor. However, Head Start dealt with children's needs earlier and thus did not belong in DOE. He clarified that Commissioner Holloway had discussed the issue at length with her staff; no one in DOE would say Head Start was not vital and important. He emphasized that Alaska needed to support a strong Head Start program. Number 0888 REPRESENTATIVE VEZEY said he appreciated the answer. However, he did not understand why the state had a pool of educational dollars being divided into K-12, Head Start, and post-secondary education funding. If Head Start was primarily an educational program rather than day care, he wondered if legislators should be making funding decisions at that micro-level, or whether the money would be better allocated by the school boards. Number 0940 MR. CROSS recognized the difficulty of making decisions about where dollars were spent too far away from the source. He also supported the concept of communities making more decisions about what happened locally. However, he believed they were discussing two different things, local community decisions and agency decisions. Whether or not a local school board would be the best place to make decisions about a program such as Head Start was open to question. Mr. Cross expressed that as it currently existed, Head Start provided for a tremendous amount of local input and decision-making in terms of developing the programs in the 88 communities. The concern here, he said, was whether DOE was the right agency. Given that Head Start was extremely effective where it was, he could not say DOE would improve it. Number 1025 REPRESENTATIVE KELLY said he understood Mr. Cross to be saying Head Start was a good fit within DCRA. Yet, as Representative Kelly looked at what DCRA did, he saw grants for rural development and legal services, municipal assistance, revenue sharing, power cost equalization and other programs. He did not see how that was a better fit for early childhood education than DOE would be. He expressed the desire to hear a stronger argument explaining exactly why Head Start did not belong in DOE or why it belonged in DCRA or somewhere else. Number 1102 MR. CROSS said he was not the best person to tell Representative Kelly why Head Start was the right fit in DCRA. His main message, he said, was that Head Start was vital for Alaska; it was functioning effectively and serving 88 communities in a high- quality way. Number 1146 CO-CHAIR ALAN AUSTERMAN asked if Head Start served a disproportionate number of rural, rather than urban, Alaskans. MR. CROSS replied he was not the best person to answer that question. CO-CHAIR AUSTERMAN responded that he would follow up on it. Number 1175 CO-CHAIR IVAN noted for the record that Representatives Elton and Nicholia had joined the meeting. REPRESENTATIVE IRENE NICHOLIA discussed the children's caucus that she had just attended. Many good things had been said there about Head Start, including parent involvement and social interactions. Having children in Head Start, she said, changed their perceptions about education. Representative Nicholia mentioned that some of the caucus attendees who would testify later could answer questions from the committee. Number 1227 KAREN PERDUE, Commissioner, Department of Health and Social Services (DHSS), discussed the proposed transfer of day care assistance and related programs to DHSS. A large department, DHSS had $850 million in funds and a full plate of activities to implement. The commissioner said DHSS looked at four possibilities, both at the community level and within the department: 1) cooperation, which was basically staying out of each other's way; 2) coordination, usually manifested through memoranda of agreement; 3) collaboration, where parties shared resources and staff in working on problems together; and 4) consolidation. She suggested caution in proposing consolidation rather than collaboration. She felt DHSS was already collaborating with DCRA on child care programs in the most fundamental way. For example, the departments had met for more than a year on implementing welfare reform. In her opinion, day care assistance was the flip side of welfare reform as it helped families avoid welfare and assisted families coming off welfare to stay off. Commissioner Perdue felt it was important to send a message to the public that they did not need to go through the welfare system to receive assistance to attend work or training. Number 1388 COMMISSIONER PERDUE explained that DHSS had worked with DCRA on a comprehensive strategy addressing working parents, as well as people moving from welfare to work. Over the next four or five years, she said, approximately 6,000 families would come off of Aid to Families with Dependent Children (AFDC). Most of those were single parents who would need some kind of help with child care costs, either during training or while working. Collaboration was important, she said, and the departments were doing so successfully. They had discussed common forms, sharing staff functions and other issues; Commissioner Perdue felt those dialogues would be fruitful. She reiterated that DHSS's plate was full. She expressed appreciation for the effort to look at integration and said she believed DHSS was working in that direction. Number 1430 CO-CHAIR AUSTERMAN said while he had heard that DHSS's plate was full, he had not heard whether the department would accept the day care program. COMMISSIONER PERDUE responded that there were reasons to oppose the transfer at this time. She did not believe the community was behind the issue. She expressed fondness for the program; she said she thought it was one of the best investments and that she would responsibly manage it. However, it was doing fine where it was. Number 1486 COMMISSIONER PERDUE concluded by discussing the relationship between Head Start and child care. She explained that Head Start was a comprehensive program with health, social development and education components that set it apart from other day care. Under welfare reform, many Head Start parents would be required to get jobs or training. However, because most Head Start programs were not full-day programs, they were difficult for working parents to use. The state was looking at ways to meet the needs of working parents receiving Head Start services. That was one good reason, Commissioner Perdue said, to keep those programs integrated. Number 1539 REPRESENTATIVE NICHOLIA mentioned that a parent from Fairbanks, who had testified the previous Saturday, had said she feared child care would be viewed as a welfare program and that she would prefer that it be known as an economic tool. Number 1567 COMMISSIONER PERDUE replied that she had also heard that comment and had been concerned about it. Welfare did have a stigma to it, she said. It was true that people on welfare generally wanted to be off of it. She hoped that as the welfare reform package was put together, people would not feel compelled to make those statements. She also hoped they would see welfare as temporary help and realize they were no different from people receiving child care subsidies. Commissioner Perdue expressed the desire to dissolve those divisions in our society. Number 1610 CO-CHAIR IVAN noted that Commissioner Hensley from DCED was present and invited him to comment if he wished. Number 1642 MYRA OLSEN, Rural Alaska Community Action Program (RurAL CAP), testified that cutting DCRA in two would reduce its effectiveness; it was working now, she said. She thought the perception was that urban people felt they no longer needed to take of rural people. People in rural areas lived under third-world conditions in many villages, she said, with few economic development opportunities. She wondered how splitting DCRA and combining it with other departments could be justified when villages had not yet moved out of the 19th century. Ms. Olsen noted that rural Alaska had the highest drop-out and teen pregnancy rates, as well as a deplorable job situation. She asked if the majority intended to keep them under the yoke of extreme poverty and not recognize their unmet needs. Closing the fiscal gap, she said, should not be done on the backs of the rural people. Head Start was not just education or day care, but economic development, empowering the parents to better their lives, including building confidence to break the cycles of abusive relationships. Number 1780 LINDA HARRISON, Family Services Coordinator, Tlingit and Haida Head Start Program, and Member, Alaska Head Start Association, expressed concern about transferring Head Start to DOE. Head Start's success, she said, was based on parent involvement. It was not basically an education program. Head Start was effective under DCRA because it was a community-based program. After a community requested the program, Head Start conducted a needs assessment to determine whether it would meet the needs of the people there. Head Start worked with all the agencies in a village, including public health agencies; local doctors and dentists, many of whom travelled to the rural villages; early childhood programs in the local schools; and police and fire departments. It also worked with "transitioning" from the infant learning program, as well as the Planned Approach to Community Health (PACH) program, alcoholism support and related programs. Number 1890 MS. HARRISON reiterated that education was not Head Start's major and only focus. It was under the right department with DCRA, she added. She did not want to see DCRA disbanded because she feared losing an important influence in rural Alaska, as well as losing the trust of the parents involved. Parents developed their own plans and goals with Head Start, she added. Number 1972 MS. HARRISON said it was not a good idea to move day care assistance to DHSS's Division of Family and Youth Services (DFYS). She emphasized that Head Start was not day care. However, Head Start was moving towards the potential of working with "wrap- around" programs to provide day care during the hours Head Start was not in session. It would not necessarily be Head Start staff providing the day care, she said, but it would occur at the same facility. Number 2008 REPRESENTATIVE NICHOLIA asked Ms. Harrison where she was from. MS. HARRISON replied she was born and raised in Fairbanks. She worked in Head Start from 1972 - 1975 with the home-based program, then went into nursing for ten years. She referred to herself as a "Head Start success story." She had been working with Head Start the past seven years. Number 2033 CO-CHAIR AUSTERMAN asked Ms. Harrison to elaborate on parent involvement in Head Start. MS. HARRISON explained that Head Start was made up of program performance standards in four major areas: parent involvement, education, social services and health. The parent involvement aspect required that Head Start be a parent-run program. A policy council composed of parents oversaw the program and developed the policies and procedures for each local grantee program. Parents were further involved in numerous aspects including acting as bus monitors, coming into classrooms, attending parent meetings and training, doing presentations, helping with community needs assessments, contacting agencies and volunteering time for agency programs like WIC and others. Number 2124 MS. HARRISON discussed the social services component, which included home visits teaching parenting or other skills, depending on what the parents wanted to learn; connecting families with services in the communities such as getting a GED or obtaining vocational training; or helping parents learn about the job market. She cited an example of Head Start assisting in Wrangell when the sawmill closed. Number 2160 MS. HARRISON referred to the health component of Head Start and explained the program required all children to have complete immunizations, tuberculosis tests and physical and dental exams. Treatment was provided and followed up, with parents being taught about health and nutrition. Education involved parents; if a parent was strong in an area, for example, he or she was utilized in the trainings and meetings. There was more, Ms. Harrison said. Number 2187 REPRESENTATIVE KELLY asked where the four components were developed. MS. HARRISON responded that Head Start national performance standards were under federal regulation. There were detailed specifics for each area. For example, one aspect of education might be appropriate ambience of a classroom, with children involved, laughing and talking among themselves or to adults. That was one aspect of approximately 200 - 300 written performance standards, Ms. Harrison said, developed in 1965. Number 2234 REPRESENTATIVE KELLY asked if those were all national standards. MS. HARRISON replied yes. REPRESENTATIVE KELLY said his point was that if Head Start remained in DCRA or was moved to another department, those standards would remain the same. The mission of Head Start and everything about it would remain the same, no matter where it was. It was a grant function of the state to fund it; it would continue to be funded, he said, whether it was under DOE or another department. Number 2249 MS. HARRISON responded that if Head Start moved to DOE, it might lose significance simply because it was preschool and early childhood. If cuts were going to be made in education, she foresaw Head Start being an easier target there. Number 2295 REPRESENTATIVE KELLY asked Ms. Harrison if she thought, in an environment of cutting budgets, that Head Start would somehow be better protected in DCRA than in DOE. Number 2300 MS. HARRISON affirmed that was exactly the point. She added that Head Start was a community-based program. Its focus was not just education; education was a small part of it. REPRESENTATIVE KELLY referred back to his original question and asserted that if Head Start standards were set nationally, its being a community-based program would not change whether it were in DCRA or some other department. Number 2342 MS. HARRISON replied DCRA was Community and Regional Affairs; Head Start was a community program. It was in an appropriate place. REPRESENTATIVE KELLY responded that although it was a community program, it was also an education program. MS. HARRISON pointed out it was also a parent involvement program, a social service program and a health program, which involved the whole community. REPRESENTATIVE KELLY said that was his original question; all those things remained no matter where it was. Number 2337 MS. HARRISON indicated that should be true for that one aspect. However, she said, there were trust development and other aspects. She likened a transfer to pulling a child out of his own family and placing him with another, where he would be a stranger. Things were going to change, she said emphatically. Number 2357 REPRESENTATIVE VEZEY asked Ms. Harrison why things would change just because it was administered through a different department. MS. HARRISON responded that different people would administer it. REPRESENTATIVE VEZEY questioned who would be different. MS. HARRISON replied the department and the people heading it. With change, people would move from one position to another and new people would be involved. She expressed that she had no idea what would be involved. Number 2387 REPRESENTATIVE VEZEY said the only person who would change was the commissioner. He suggested that Ms. Harrison and others in the Head Start program probably never dealt with the commissioner directly. MS. HARRISON reiterated that with the changes, people would quit or move. Things would change. Number 2411 REPRESENTATIVE ELTON asked if the committee standard was to make the agencies prove Head Start should move, or if the bill sponsor needed to prove it should move. Representative Elton suggested the committee think about that as the debate continued. He added that he was not sure it was helpful to ask people to prove it should not move. He thought it was more helpful to address whether it would be better for it to move somewhere else. Number 2433 CO-CHAIR IVAN expressed appreciation for the testimony provided, which the committee would use as guidance. REPRESENTATIVE NICHOLIA thought there was a misconception in saying there would be no change when, in fact, changes were being made to a department. There would definitely be changes when moving a person from one division to another, she said. Number 2470 DWIGHT PERKINS, Special Assistant, Office of the Commissioner, Department of Labor, said he spoke on behalf of Commissioner Cashen. TAPE 96-9, SIDE B Number 0008 MR. PERKINS referred to sections of HB 409 that transferred functions from DCRA to the Department of Labor, particularly the STEP program, Jobs Partnership Training Act (JTPA) and the dislocated workers program, as well as the entire Division of Occupational Licensing. His department's mission, he explained, was to foster and promote the welfare of Alaska's wage earners; improve their working conditions; and advance their opportunities for profitable employment. On the other hand, the mission of DCRA was to render maximum state assistance to government and community at regional levels. Mr. Perkins noted that the Department of Labor was currently working in partnership with DCRA; he said the high level of cooperation between the two departments allowed them to successfully and efficiently administer the state training and employment program, while ensuring the program's integrity. Number 0059 MR. PERKINS said the Department of Labor felt that in a time of declining resources, no savings associated with the transfer could be identified that would justify the required expense of moving the Division of Occupational Licensing. Number 0084 REPRESENTATIVE PETE KOTT referred to the four identified areas proposed for transfer and asked Mr. Perkins if the move of the Division of Occupational Licensing was the only one opposed by the Department of Labor. Number 0094 MR. PERKINS explained that the STEP program was administered in a partnership between the Department of Labor and DCRA. While DCRA received money and ran the programs, the Department of Labor collected and helped distribute the funds. Mr. Perkins suggested the Department of Administration would have the numbers for that. He indicated the Department of Labor was perplexed about where the people would be moved to; they felt the program was already working fine and they could not identify savings in the long run to justify the enormity of potential up-front costs. He said they were anxiously awaiting Representative Kelly's analysis of the savings. The Department of Labor had been working earnestly with Representative Kelly to produce the information requested, he added. However, they were having a hard time thinking where the savings would be. Number 0165 REPRESENTATIVE KELLY responded that he did not recall asking the Department of Labor to produce cost savings. He had asked the departments that were merging to provide a model, to see what they thought was their best-case scenario. He said his own office was also working on that. However, he had not asked other agencies to produce cost savings; he would leave it to those agencies and the Administration, he said, to find efficiencies in the out years if they so chose, if they saw efficiencies that could be reached. Never was it his expectation that the "catching" agencies would provide a cost savings analysis. All he had asked for were fiscal notes on up-front moving costs. Number 0196 MR. PERKINS responded that those still needed to be reviewed. In some of their initial ones, he said, they had looked at the moving costs, but not the associations of data processing resources needed for the move, remodeling and other costs for which the Department of Administration would have the figures. Number 0219 REPRESENTATIVE NICHOLIA asked why the bill was before the committee if it was not a cost savings bill. Number 0229 REPRESENTATIVE KELLY replied that was not the question he was answering. He said the question Mr. Perkins had posed stemmed from his thinking that Representative Kelly was asking the Department of Labor for cost saving efficiencies. The answer to that, Representative Kelly said, was no, he was not asking the department for that. He himself, the subcommittees and the Administration would come up with those. The cost savings, he said, were going to be achieved in the merger of DCED and DCRA. REPRESENTATIVE NICHOLIA responded that Mr. Perkins had said he could not see any cost savings in moving this division to another department. Number 0259 REPRESENTATIVE KELLY stated that Mr. Perkins had said there was no cost savings in the Department of Labor, which Representative Kelly recognized. Representative Kelly added he was not expecting costs savings there. He clarified that Mr. Perkins had not been making a statement overall about the cost saving efforts of HB 409. Number 0269 CO-CHAIR AUSTERMAN referred to the discussion by Mr. Perkins of the Department of Labor and DCRA working together on job training and the STEP program; he asked whether Mr. Perkins could see an efficiency if those two programs were moved to the Department of Labor. Number 0288 MR. PERKINS replied that it might take time to build those efficiencies in. Right now, DCRA handled those functions. The Department of Labor collected funds and distributed them, although they might help with some programs. Mr. Perkins emphasized the partnership relationship. He expressed uncertainty about achieving efficiencies downstream. He reiterated the department's concern about where to put the people and said there were questions they had been unable to answer. As Representative Kelly had indicated he would present his plan within a week or two, the Department of Labor wanted to see how that might affect them. Number 0378 ERNESTINE HANLON testified in opposition to HB 409, expressing concern it would lessen the effectiveness of Head Start if that program were transferred to DOE, because DOE would reportedly be looking at cutbacks that would then affect Head Start. She supported keeping Head Start where it was. Number 0429 REPRESENTATIVE KOTT asked, if HB 409 were to become law, creating a new department, whether Ms. Hanlon would oppose Head Start being retained in that new department. MS. HANLON responded that she did not understand the question. REPRESENTATIVE KOTT explained that HB 409 consolidated two departments into one and dispersed some activities currently performed by the departments. He clarified that if DCRA and DCED were consolidated into one department known as the Department of Community and Economic Development, keeping Head Start within that new department rather than transferring it to DOE, he wanted to know whether Ms. Hanlon would be opposed to that. Number 0485 MS. HANLON emphasized what she was opposed to was that every time any changes came about, it was usually the rural people who were most affected and who lost out the most. They were not the main focus of any decisions, she said. "As rural people," she said, "we can't stand to lose anymore. We've lost enough." Number 0519 CHESTER MIYASATO testified in opposition to HB 409, saying he did not believe making one large department would be effective for programs such as Head Start. He discussed the collaboration project under DCRA, which had funded him for several years to attend Alaska Head Start Association meetings. He said the paper chase from a larger department would bog things down. He could not imagine a larger department operating effectively for something like Head Start that was already running efficiently and smoothly. Number 0620 MR. MIYASATO explained his children were involved with Head Start. He expressed that placing Head Start under DOE would diminish the quality of the program at some point. Eventually, he said, when cuts came about, Head Start would be seen as the program from which to cut first. Mr. Miyasato spoke about Head Start's emphasis on early childhood and again suggested it would be harmed by being moved to a larger department. Number 0684 REPRESENTATIVE KELLY asked if Mr. Miyasato was aware the entire Head Start budget would be sent to the new department. He added that the budget would probably receive some cuts, just as everything else was likely to this year. MR. MIYASATO replied he was aware of that. He expressed apprehension about the effectiveness of a larger department. Number 0733 REPRESENTATIVE KELLY responded to Mr. Miyasato's suggestion that Head Start would be the first to be cut under DOE. He explained that the program had been in his budget subcommittee the previous year; due to his own efforts, he said, it was not cut at all, while a lot of other things were. He added that in the majority, there was an objection to cutting Head Start. Number 0759 MR. MIYASATO said at the same time, the people who helped Head Start, such as the collaboration project with DCRA, were essential to Head Start itself. He envisioned the quality going down if the department became larger. REPRESENTATIVE KELLY emphasized that HB 409 did not cut Head Start, nor cut anything. Number 0807 REPRESENTATIVE NICHOLIA commented that while Representative Kelly might be the current subcommittee chairman for DCRA, he would not always be there to protect it. She added that HB 409 had impacts on future children's lives. Number 0845 ANN VELARDI distributed Head Start buttons that read "Our children's hearts are in your hands" to the committee and audience. A Head Start parent from the Chugiak/Eagle River area, she opposed HB 409. She voiced concern about transferring Head Start to DOE because she felt education in Alaska was run on a different philosophy from Head Start, which worked "from the bottom up," coming from community need, with decisions made by parents. In education, on the other hand, dictates were sent to communities; parents were not as big a part of that process. Although they would only be changing the commissioner, eventually, from the top down, she said, that philosophy would filter down. Number 0915 MS. VELARDI discussed Head Start components, saying they were not a blueprint, but guidelines. If twenty different people were handed the same blueprint, they would build the same house. But if they were handed guidelines, they would build twenty similar houses that were not exactly the same. Ms. Velardi's experience with DCRA had been extremely positive, not just as a Head Start parent but also as a policy council president and as a member of the Chugiak Children's Services board of directors, the Alaska Head Start Association and the Region 10 Head Start Association. What she had seen with DCRA was that the department did not send dictates down to the people, but worked with them. She was not sure they would get that level of commitment from DOE. Number 0979 MS. VELARDI explained that DOE's program was mandated to communities, whereas Head Start was optional and originated in the community itself. Each community, within Head Start guidelines, was free to work out different options. Head Start helped parents obtain job skills, increase parenting skills and become advocates in their communities. Ms. Velardi suggested that school districts, which did not know how to invite parents to become part of the process, could learn from Head Start about parent involvement. Placing Head Start, which had successfully involved parents for 30 years, into DOE did not seem fair, she said. Number 1060 REPRESENTATIVE ELTON noted that Ms. Velardi had been named the current Head Start Parent of the Year. He asked her what she thought would happen if those community-based organizations in the 88 communities also became clients. MS. VELARDI said she had spoken on the regional level to other people who were attached to school districts; they were often lacking direction and guidance. She expressed that just being left alone was not the answer. It was also not good management. Guidance was needed from a larger entity, as well as coordination of efforts. Head Start really was a series of small businesses, in some ways, around the state, she said, supported by state and federal money. Number 1165 DEANNA CAPTAIN, Chairperson, Tanana Chiefs Head Start Policy Council, and a Head Start mother for several years, said she backed Head Start 100 percent. She voiced concern about the changes in HB 409. If DOE took over Head Start, she felt it would not be considered a priority, as it was not mandated by the state. She feared it would be first in line to be cut from the budget. She spoke about Head Start's focus on family unity and said her community wanted to see Head Start continue under DCRA. She explained that Head Start was not a day care program, but also provided socialization skills for children, as well as education in nutrition, safety and health. Number 1290 MS. CAPTAIN explained that Head Start recognized the parent as the first educator. In Ruby, she said, nine children were enrolled in the Head Start home-based program. She added that she would support an alcohol and tobacco tax, a percentage of which she wished to see go into the children's trust fund. Number 1328 REPRESENTATIVE KOTT asked Ms. Captain to elaborate on why she thought Head Start was so successful in the present department, as opposed to shifting it to DOE. MS. CAPTAIN responded that under DCRA, the program was family- oriented. If taken over by DOE, she felt the emphasis would be different because Head Start was not mandated, but rather community-based and optional. She feared cuts to the program. Number 1400 CO-CHAIR IVAN commented that he had hoped to get to the Department of Administration's estimated moving costs which had been provided to the committee. He said the committee would address those estimates at the next meeting. He also asked that Representative Kelly develop an organizational flow chart for the committee to view. Number 1474 CO-CHAIR AUSTERMAN suggested that a DCRA representative should be at the table the next time HB 409 was discussed. Through listening to testimony, Co-Chair Austerman said, he had developed enough questions to direct to the department. He noted for the benefit of testifiers that an organizational chart prepared by Representative Kelly's office existed, showing proposed moves. He said he would like input on the perceived affects of placing Head Start into the new Department of Community and Economic Development, rather than into DOE, as currently proposed under HB 409. Number 1554 REPRESENTATIVE ELTON asked Representative Kelly whether he envisioned a sponsor substitute incorporating some of the testimony and if so, when. REPRESENTATIVE KELLY replied yes, he was working on that. He added that there were issues brought up at the first meeting which he had thought legitimate and sensible; he was making some of those changes. Whether there would be a sponsor substitute or committee substitute, he did not know. Number 1607 REPRESENTATIVE KOTT commented that testimony had suggested that consolidating DCRA and DCED would hurt the "identity" of rural Alaska. If that were proven beyond a reasonable doubt, he would not support HB 409, he said; nor did he feel the bill's prime sponsor would have that intent. He suggested that by dispersing some programs, if they did go along with the consolidation, maybe they would be able to raise the identity of rural Alaska. He hoped it would not become a rural-versus-urban issue. He wanted the proper recognition to be given to rural Alaska by every department. However, he had not heard any testimony, to date, that led him to believe rural Alaska would be harmed at all. Number 1703 CO-CHAIR IVAN noted that in looking for changes to HB 409, he would rather deal with individual amendments, preferably simple, rather than a committee substitute. The fiscal notes involved, he said, might get confusing if not handled amendment by amendment. Number 1731 REPRESENTATIVE NICHOLIA stated that in the previous Saturday's testimony, a person had spoken about DCRA bridging the gap between Juneau and rural Alaska, saying they hated to see that bridge dissolved. People had finally set up communication systems, Representative Nicholia said, and knew who to deal with in DCRA. If the apple cart were upset, it would take years again for people to relearn the system. This bill did upset the system currently in place. CO-CHAIR IVAN said that concluded the hearing on HB 409 and recessed the meeting at 2:33 p.m. HB 330 - UNINCORP COMMUNITY CAPITAL PROJ GRANTS TAPE 96-10, SIDE A Number 0001 CO-CHAIR IVAN called the meeting back to order at 2:41 p.m. He noted that committee packets for HB 330 included the bill; the sponsor statement; affected statutes; a fiscal note from DCRA; a zero fiscal note from the Department of Administration; letters in support; and additional backup material. He invited Representative Carl Moses to present the bill. Number 0053 REPRESENTATIVE CARL MOSES, sponsor of HB 330, explained the bill called for more equitable distribution in the state's unincorporated capital project matching grant program by affording unincorporated communities, existing within boroughs, the chance to obtain the full $25,000 matching grant. This had been consistently available to those unincorporated communities that existed outside of organized boroughs. Communities inside boroughs, which had shared from a pool of resources obtained by the boroughs, had fared much less well, on average, than unincorporated communities outside of boroughs. This bill would restore equity by making communities within boroughs eligible under the same program currently in place for outside communities. It would have them adhere to the same criteria for eligibility; it would correspondingly reduce their boroughs' eligibility through the municipal capital project matching grant program to avoid double-dipping. It would also increase the list of potential applicant communities by up to 60. Representative Moses noted that participants familiar with the issue were available to testify via teleconference. He added that experts were also present to answer technical questions. He concluded by noting there had been a similar bill in 1964. Number 0280 CO-CHAIR IVAN referred to the unincorporated communities, municipalities and second-class cities that received the $25,000 capital matching grants under the program. He asked whether HB 330 affected unincorporated communities not currently eligible or whether there was a funding disparity among recipients. Number 0325 REPRESENTATIVE MOSES responded that an unincorporated community within a borough received less money, sharing in a pool received by the borough. If it were outside a borough, it received the full $25,000. In essence, the law discouraged a community from going into a borough, because it would receive less money under the grant program. Number 0366 CO-CHAIR AUSTERMAN noted that DCRA's fiscal note indicated approximately 60 unincorporated communities could participate; the fiscal note starting in 1996 was for $42 million, increasing to $49 million in FY 2001. He thought HB 330 was a good bill and that the committee should go ahead and move it out; the only question would probably be the fiscal note, he said. He added that the bill would go to the House Finance Committee next, where the fiscal note should be discussed. Number 0425 REPRESENTATIVE MOSES clarified the amounts were not millions of dollars, but thousands. He noted that in the similar 1964 legislation, there was no fiscal note attached, indicating DCRA felt it could handle it within its budget. Number 0442 REPRESENTATIVE ELTON said he had no problem with moving it from committee. He said it was a great program for unorganized communities outside of boroughs; it ought to be a great program for those inside boroughs as well. He added that they should not penalize everyone else by not funding the program and having the money taken from other people's budgets. He encouraged the legislature to take the second step, to not only authorize it, but to fund it as well. Number 0483 CO-CHAIR IVAN noted that the sponsor had said unincorporated communities belonging to a borough received less than those in unorganized boroughs. This seemed like a reverse of policy. He added it was in the state's interest to organize communities in as many areas as possible. Number 0513 REPRESENTATIVE KOTT asked Representative Moses about the grant monies available. Specifically, he wondered if there was a set amount of money, without adding any to the grant program, to disburse to the various communities. Number 0550 REPRESENTATIVE MOSES replied more could be added to it. Technically, though, it would be pro rata among the communities, slightly decreasing the present allotments unless money were added. He emphasized that the amounts should be equitable to all unincorporated communities, without penalizing those that had joined a borough. In essence, he said, that would encourage communities to disassociate themselves from boroughs. Number 0598 REPRESENTATIVE KOTT responded that was basically what he was driving at; he did not think more money needed to be added to the program. It would be nice, he said, but not required. It was an equitability issue and it would be the only fair thing to do. Number 0624 REPRESENTATIVE ELTON said he thought that was exactly right. They did not have to expand the pie. However, if they did not, everybody would get less, which he did not favor. If the program was good for those now receiving it, it should be good for others. If they did not expand the pie, people would be penalized because the legislature did the right thing by expanding the program to other communities. He thought HB 330 was equitable and fair and ought to be moved out of committee. However, he hoped the legislature would think about making the pie a little bigger to accommodate the new communities without penalizing the existing ones. Number 0687 WALT WREDE, Manager, Lake and Peninsula Borough, testified via teleconference from King Salmon in favor of HB 330. He said the bill would implement the original intent of the program, as he understood it, fixing a problem that had existed for several years. He explained the Lake and Peninsula Borough area was adversely affected by the program as it now existed. The borough had 11 unincorporated villages, representing almost half the borough's population, that did not qualify for the $25,000 matching grant funds. Number 0774 MR. WREDE explained that in 1995, the Lake and Peninsula Borough received a grant of $44,000, to be divided up among the 11 communities; they expected to receive approximately the same amount for 1996. He noted that $4,000 was not much money. If each village was guaranteed $25,000 per year, that would total $275,000 per year. He added that communities could roll funds over from year to year, which would allow money to accumulate. Number 0827 MR. WREDE cited a number of reasons why he felt the current system was unfair. He noted that Representative Elton had spoken eloquently about the fairness issue. Mr. Wrede said the way the program was currently set up hurt economic development and investment in capital improvements in the borough. There was also a policy issue, which Co-Chair Ivan had mentioned, where the state was trying to downsize and transfer more responsibility to local governments. Mr. Wrede felt that was good, but said the current grant program acted as a disincentive to forming organized boroughs. He reiterated that the borough strongly supported HB 330. Number 0990 DAN SALMON, Administrator, Village of Igiugig, testified via teleconference from King Salmon. He explained that Igiugig, a small village of approximately 40 people that swelled to 150 - 200 in the summertime due to tourism, was located at the west end of Lake Iliamna, within the Lake and Peninsula Borough. He said HB 330 greatly affected his community. Igiugig currently funded its own preschool, snow removal, street maintenance, refuse disposal and so forth. Funds to garner capital projects were difficult to obtain. The village lacked sufficient bulk fuel storage facilities, fire fighting equipment, emergency services facilities, and equipment to build and maintain projects, among other things. As intended originally, Mr. Salmon said, the grant program would have been an avenue for Igiugig to realize its economic development goals and plans. It also would have created a level playing field for communities. Number 1067 MR. SALMON said right now, his village could not compete with unincorporated villages in unorganized boroughs. Igiugig, with its $4,000 grants, had to compete for projects with communities that could put up $25,000. That inequitable distribution of money had resulted in less major capital projects being accomplished in his community. He said Igiugig supported HB 330, as he was sure other similarly situated villages would. Number 1165 REPRESENTATIVE KOTT moved that HB 300 move from committee with individual recommendations and accompanying fiscal notes. There being no objection, it was so ordered. CO-CHAIR IVAN informed members that the committee would address Executive Order 93, HB 391 and HB 358 at the next meeting on Thursday, February 8. Number 1200 ADJOURNMENT There being no further business to conduct, CO-CHAIR IVAN adjourned the House Community and Regional Affairs Committee meeting at 2:55 p.m.