Legislature(1997 - 1998)
03/20/1997 08:05 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE March 20, 1997 8:05 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative Ethan Berkowitz Representative Fred Dyson Representative Kim Elton Representative Mark Hodgins Representative Ivan Ivan Representative Al Vezey MEMBERS ABSENT All members present. COMMITTEE CALENDAR SENATE BILL NO. 77 "An Act relating to the Alaska Day of Prayer." - PASSED SB 77 OUT OF COMMITTEE HOUSE BILL NO. 84 "An Act limiting the authority to conduct pull-tab charitable gaming to qualified organizations that are exempt from taxation under 26 U.S.C. 501(c)(3) or (19); and providing for an effective date." - HEARD AND HELD *HOUSE BILL NO. 143 "An Act relating to the art in public places requirements for state-owned and state-leased buildings and facilities." - HEARD AND HELD *HOUSE BILL NO. 78 "An Act relating to the definition of certain state receipts; and providing for an effective date." - SCHEDULED BUT NOT HEARD *HOUSE BILL NO. 155 "An Act relating to hearings before and authorizing fees for the State Commission for Human Rights; and providing for an effective date." - SCHEDULED BUT NOT HEARD HOUSE BILL NO. 83 "An Act relating to commercial motor vehicle inspections; and providing for an effective date." - SCHEDULED BUT NOT HEARD (* First public hearing) PREVIOUS ACTION BILL: SB 77 SHORT TITLE: ALASKA DAY OF PRAYER SPONSOR(S): SENATOR(S) TAYLOR, Leman, Phillips, Parnell, Ward, Green, Pearce, Halford, Duncan, Sharp, Miller, Kelly, Torgerson, Mackie; REPRESENTATIVE(S) Grussendorf, Dyson JRN-DATE JRN-PG ACTION 02/04/97 226 (S) READ THE FIRST TIME - REFERRAL(S) 02/04/97 226 (S) STATE AFFAIRS 02/25/97 (S) STA AT 3:30 PM BELTZ ROOM 211 02/25/97 (S) MINUTE(STA) 02/26/97 516 (S) STA RPT 3DP 02/26/97 516 (S) DP: GREEN, MILLER, WARD 02/26/97 516 (S) ZERO FISCAL NOTE (S.STA) 03/05/97 (S) RLS AT 11:52 AM FAHRENKAMP RM 203 03/05/97 (S) MINUTE(RLS) 03/06/97 592 (S) RULES TO CALENDAR 3/6/97 03/06/97 598 (S) READ THE SECOND TIME 03/06/97 598 (S) ADVANCED TO THIRD READING UNAN CONSENT 03/06/97 598 (S) READ THE THIRD TIME SB 77 03/06/97 598 (S) COSPONSOR(S): LEMAN, PHILLIPS, PARNELL 03/06/97 598 (S) WARD, GREEN, PEARCE, HALFORD, DUNCAN, 03/06/97 598 (S) SHARP, MILLER, KELLY, TORGERSON, MACKIE 03/06/97 599 (S) PASSED Y20 N- 03/06/97 607 (S) TRANSMITTED TO (H) 03/07/97 577 (H) READ THE FIRST TIME - REFERRAL(S) 03/07/97 577 (H) STATE AFFAIRS 03/07/97 594 (H) CROSS SPONSOR(S): GRUSSENDORF 03/10/97 618 (H) CROSS SPONSOR(S): DYSON 03/20/97 (H) STA AT 8:00 AM CAPITOL 102 BILL: HB 84 SHORT TITLE: PULL-TABS LIMITED TO 501(C)(3) OR (19) SPONSOR(S): REPRESENTATIVE(S) MARTIN JRN-DATE JRN-PG ACTION 01/22/97 122 (H) READ THE FIRST TIME - REFERRAL(S) 01/22/97 122 (H) STATE AFFAIRS, L&C, FINANCE 03/11/97 (H) STA AT 8:00 AM CAPITOL 102 03/11/97 (H) MINUTE(STA) 03/13/97 (H) STA AT 8:00 AM CAPITOL 102 03/13/97 (H) MINUTE(STA) 03/15/97 (H) STA AT 11:00 AM CAPITOL 102 BILL: HB 143 SHORT TITLE: REPEAL ART IN PUBLIC PLACES REQUIREMENT SPONSOR(S): REPRESENTATIVE(S) VEZEY JRN-DATE JRN-PG ACTION 02/17/97 374 (H) READ THE FIRST TIME - REFERRAL(S) 02/17/97 375 (H) STATE AFFAIRS 03/20/97 (H) STA AT 8:00 AM CAPITOL 102 WITNESS REGISTER JOE AMBROSE, Legislative Assistant to Senator Robin Taylor State Capitol, Room 30 Juneau, Alaska 99801-1182 Telephone: (907) 465-3873 POSITION STATEMENT: Presented sponsor statement for SB 77. REPRESENTATIVE TERRY MARTIN Alaska State Legislature State Capitol, Room 502 Juneau, Alaska 99801-1182 Telephone: (907) 465-3783 POSITION STATEMENT: Sponsor of HB 84. DENNIS POSHARD, Director Charitable Gaming Division Department of Revenue P.O. Box 110440 Juneau, Alaska 99811-0440 Telephone: (907) 465-2229 POSITION STATEMENT: Provided testimony on HB 84. GERALD J. DORSHER, Legislative Officer Veterans of Foreign Wars P.O. Box 240003 Douglas, Alaska 99824 Telephone: (907) 364-3346 POSITION STATEMENT: Provided testimony on HB 84. GEORGE WRIGHT, Representative Alaska Native Brotherhood Camp Number 2 320 Willoughby Avenue, Suite 100 Juneau, Alaska 99801 Telephone: (907) 586-2049 POSITION STATEMENT: Provided testimony in opposition to HB 84. JOCELYN YOUNG, Curator of Public Art Anchorage Museum of History and Art 121 West 7th Avenue Anchorage, Alaska 99501 Telephone: (907) 343-6473 POSITION STATEMENT: Provided testimony on HB 143. DAVID ROSENTHAL P.O. Box 635 Cordova, Alaska 99574 Telephone: Not provided POSITION STATEMENT: Provided testimony in opposition to HB 143. SCOTT HAMANN P.O. Box 934 Kenai, Alaska 99611 Telephone: (907) 283-4481 POSITION STATEMENT: Provided testimony in support of HB 143. VICTORIA LORD, Director Ketchikan Arts Council 338 Main Street Ketchikan, Alaska 99901 Telephone: (907) 225-2211 POSITION STATEMENT: Provided testimony in opposition to HB 143. EMILY MOORE 722 Park Avenue Ketchikan, Alaska 99901 Telephone: (907) 225-6558 POSITION STATEMENT: Provided testimony in opposition to HB 143. MICHAEL OLSON, President Seward Arts Council P.O. Box 2152 Seward, Alaska 99664 Telephone: (907) 224-7162 POSITION STATEMENT: Provided testimony in opposition to HB 143. ANNIE STOKES 570 Alder Street Juneau, Alaska 99801 Telephone: (907) 586-2852 POSITION STATEMENT: Provided testimony in opposition to HB 143. SHANNON PLANCHON, Grant Administrator Alaska State Council on the Arts 411 West 4th Avenue Anchorage, Alaska 99501 Telephone: (907) 269-6610 POSITION STATEMENT: Provided testimony in opposition to HB 143. ALAN MUNRO 120 West 9th Street Juneau, Alaska 99801 Telephone: (907) 586-3694 POSITION STATEMENT: Provided testimony in opposition to HB 143. MIKE ANDERSON P.O. Box 1603 Cordova, Alaska 99574 Telephone: (907) 424-3142 POSITION STATEMENT: Provided testimony in opposition to HB 143. JAMES EVENSON P.O. Box 324 Kenai, Alaska 99611 Telephone: (907) 776-8060 POSITION STATEMENT: Provided testimony in opposition to HB 143. CARL KRONBERG 1266 Millar Ketchikan, Alaska 99901 Telephone: (907) 225-1297 POSITION STATEMENT: Provided testimony in opposition to HB 143. CAROL BRYNER 626 "N" Street Anchorage, Alaska 99501 Telephone: (907) 277-7967 POSITION STATEMENT: Provided testimony in opposition to HB 143. SYBIL DAVIS 1116 Timberline Court Juneau, Alaska 99801 Telephone: (907) 780-4376 POSITION STATEMENT: Provided testimony in opposition to HB 143. LYNETTE TURNER, President Arts for a Healthy Alaska 305 St. Anns Avenue Juneau, Alaska 99824 Telephone: (907) 364-2420 POSITION STATEMENT: Provided testimony in opposition to HB 143. JENANN KIRCHMEIER Address not provided Telephone: Not provided POSITION STATEMENT: Provided testimony in opposition to HB 143. ACTION NARRATIVE TAPE 97-29, SIDE A Number 0001 The House State Affairs Standing Committee was called to order by Chair Jeannette James at 8:05 a.m. Members present at the call to order were Representatives James, Dyson, Elton, Ivan and Vezey. Members absent were Berkowitz and Hodgins. REPRESENTATIVE IVAN IVAN introduced Mr. Michael Chatman from the audience. He was here at the capitol building all day with a project called "Follow That Bill." He hoped that Mr. Chatman would not pick up on his bad habits. SB 77 - ALASKA DAY OF PRAYER The first order of business to come before the House State Affairs Standing Committee was SB 77, "An Act relating to the Alaska Day of Prayer." CHAIR JEANNETTE JAMES called on Mr. Joe Ambrose, Legislative Assistant to Senator Robin Taylor, sponsor, to present the bill. Number 0136 JOE AMBROSE, Legislative Assistant to Senator Robin Taylor, read the following sponsor statement into the record: "In 1952, the US Congress resolved that a National Day of Prayer be established, with the specific date subject to Presidential proclamation. On May 5, 1988, President Ronald Reagan signed into law a bill setting aside the first Thursday in May each year as the National Day of Prayer. "Senate Bill 77 would also mark the first Thursday in May as the Alaska Day of Prayer. "Observance of a Day of Prayer is as old as the nation itself and in fact pre-dates the Declaration of Independence. George Washington first proclaimed a day of prayer in 1775, during the First Continental Congress. "Thomas Jefferson, who termed the First Amendment `a wall of separation between church and state', said he was convinced that a man's natural right to religious expression was not in opposition to his political function. "Establishment of a Day of Prayer in Alaska follows a tradition dating back to the Founding Fathers. It would encourage Alaskans to pray without compelling them to do so." Number 0257 REPRESENTATIVE ETHAN BERKOWITZ asked Mr. Ambrose if any other states had adopted a state day of prayer to complement the national day? Number 0265 MR. AMBROSE replied seven states had adopted a state day of prayer. In addition, many stated observed the day through an annual proclamation. The Alaska Senate two years ago passed a resolution asking the Governor to declare the first Thursday in May as the day of prayer in Alaska. Number 0324 REPRESENTATIVE BERKOWITZ asked Mr. Ambrose if there was any particular reason why the state needed a day of prayer when there was a national day? Number 0331 MR. AMBROSE replied it would put a special emphasis on the day and it would bring Alaskans together. Number 0348 REPRESENTATIVE KIM ELTON commented that he believed it should be the second Thursday in May because by that time the body would need it more than the first Thursday in May. CHAIR JAMES called for a motion to pass the bill out of the committee. Number 0378 REPRESENTATIVE FRED DYSON moved that SB 77 move from the committee with individual recommendations and the attached zero fiscal note(s). There was no objection, SB 77 was so moved from the House State Affairs Standing Committee. REPRESENTATIVE DYSON stated, for the record, that he had stepped on the presenter's toes, literally; not figuratively, and apologized. HB 84 - PULL-TABS LIMITED TO 501(C)(3) OR (19) The next order of business to come before the House State Affairs Standing Committee was HB 84, "An Act limiting the authority to conduct pull-tab charitable gaming to qualified organizations that are exempt from taxation under 26 U.S.C. 501(c)(3) or (19); and providing for an effective date." CHAIR JAMES called on Representative Terry Martin, sponsor of HB 84, to present the bill. Number 0405 REPRESENTATIVE TERRY MARTIN, Alaska State Legislature, distributed to the committee members a handout titled, "A Great Time to Brag." People were concerned that the bill would stop their source of money from the pull-tabs. He told them it would depend on what they told the committee and what they had been doing with the money. If the money did not go towards charitable purposes, then there would be a problem. It was also a time for the charitable groups and the citizens to brag about their programs and how they had been helping true charitable purposes. Had they been giving their money to Beans Cafe, or to scholarships, for example? Had they been helping youth athletic programs? Were organizations giving out more scholarships now that they had a permit? It was a great time to see what was happening with the millions and millions of dollars gained from pull-tabs. From the state's perspective, 8 percent of the total of $270 million was not very much when illegal gamblers paid 10 to 15 percent for protection. He believed some of the money went to the Alaska Charitable Gaming Association, Inc. to protect what they were doing. Some used the money to fight regulations in the courts instead of coming to the legislature asking for adjustments. He reiterated it was a great opportunity to scrutinize what was happening in the pull-tab world. Number 0669 REPRESENTATIVE MARTIN further stated that HB 84 was strictly related to pull-tabs. It had nothing to do with the organizations that had a permit for auctions or bingos, for example. Number 0699 REPRESENTATIVE IVAN asked Representative Martin if HB 84 would prohibit municipalities from selling pull-tabs? Number 0730 REPRESENTATIVE MARTIN replied it would be very interesting to find out what the municipalities were doing. CHAIR JAMES asked Representative Martin to answer the question of Representative Ivan. REPRESENTATIVE MARTIN replied he did not know if the bill would prohibit municipalities. If they were not using the money for charitable purposes then they should be questioned. CHAIR JAMES asked Representative Martin if the bill prohibited them? REPRESENTATIVE MARTIN replied, "As I see it now it does, yes." It was up to the committee if municipalities should be put back in as charitable organizations. If they were using the money just for more revenue instead of taxation, then they should be questioned. Number 0774 REPRESENTATIVE IVAN asked Representative Martin if the unincorporated communities would also be impacted by HB 84? Would they be prevented from participating for example? Number 0826 REPRESENTATIVE MARTIN replied, from my point of view, they should be if the money was not going for charitable purposes. If the money was going to the local administration then it was not very charitable. That was what taxes and other avenues of money were for, even in unincorporated communities. Number 0851 CHAIR JAMES asked Representative Martin to explain the identified codes in the bill and which ones would be excluded. REPRESENTATIVE MARTIN deferred the question to Mr. Poshard, Director, Charitable Gaming Division, Department of Revenue. Number 0895 REPRESENTATIVE IVAN asked Representative Martin if he had documentation that accounted for the amount of dollars from pull- tab sales being placed into campaigns? Number 0925 REPRESENTATIVE MARTIN replied he was going to save that information for his other bill - HB 156. At such time, he would bring the backup information that would give a person an idea of how much money was going into the political process - directly and indirectly. "It is absolutely amazing how much money. They make the oil companies look like little pimps." Number 0955 CHAIR JAMES asked Representative Martin if campaign finance reform last year eliminated political contributions from pull-tab activities? Number 0963 REPRESENTATIVE MARTIN replied, "We attempted to." But the words and phrases did not accomplish what we wanted to. The backup information would show the loopholes. The biggest loophole, he declared, was the prevention of corporations and unions from contributing. The legislation did not prevent non-profit organizations, however. Number 1004 CHAIR JAMES replied that campaign finance reform made it specifically clear that only individuals could make political contributions. Number 1017 REPRESENTATIVE MARTIN replied there were big loopholes that needed to be closed. Number 1032 REPRESENTATIVE BERKOWITZ asked Representative Martin if he was seeking to exclude certain non-profits from qualifying? Number 1044 REPRESENTATIVE MARTIN replied the challenge of HB 84 was to find out which groups were not fulfilling the idea of charitable purposes from the sale of pull-tabs. They had not been challenged in 10 years. "Just because they are our friends and neighbors and everything else, doesn't mean the monies they earn from pull-tabs go to charitable purposes." Number 1083 REPRESENTATIVE BERKOWITZ asked Representative Martin if he had a list of the organizations that he was seeking to exclude? CHAIR JAMES stated the Administration was going to come forward to answer that question. Number 1096 REPRESENTATIVE IVAN commented that the legislature was trying to downsize government. Therefore, he believed that this bill would have a detrimental impact on some of the communities that he represented. He asked Representative Martin what was his opinion? Number 1136 REPRESENTATIVE MARTIN replied it could go either way. It depended on what the committee discovered. Part of the reason that pull- tabs came about was to help the charitable needs of a community. In addition, of the $270 million, less than 8 percent went to actual charities. And from that charity alone maybe one-half of the 8 percent went to an actual charitable purpose. Other states mandated that 30 percent off of the top went to charity. Number 1210 CHAIR JAMES asked Representative Martin if HB 84 did that? Number 1226 REPRESENTATIVE MARTIN replied HB 84 scrutinized what the groups were doing. CHAIR JAMES asked Representative Martin if HB 84 had anything to do with the percentages? REPRESENTATIVE MARTIN replied, "No." His second bill addressed the percentages. CHAIR JAMES stated that the committee members should focus on HB 84. REPRESENTATIVE MARTIN replied HB 84 focused on what groups should be allowed and which groups should not be allowed. Number 1250 DENNIS POSHARD, Director, Charitable Gaming Division, Department of Revenue, explained that the division and the department had not taken a position of either for or against the bill. "We feel that the legislature has every right to decide who does and who does not deserve to receive a permit to conduct charitable gaming activities." It had been difficult to come up with an accurate fiscal note because no state agency maintained a list of 501(c)(3)'s, 501(c)(19)'s or any other 501(c) type of organization. The Income, Excise and Audit Division and the Corporation Division maintained a list of 501(c)'s, but with no further designation. As a result, the division contacted the Internal Revenue Service (IRS) that provided a list of all of the designations. The division received it last week, therefore, he did not have the time to redo the fiscal note. The division was currently comparing the list of 501(c)(3)'s and 501(c)(19)'s from the IRS with the division's list of pull-tab permitees. The division intended to create three lists: organizations that currently had pull-tab permits that would no longer be eligible; organizations that currently had pull- tab permits that would remain eligible; and organizations that did not have a pull-tab permit but would be eligible. The lists would - hopefully - be available tomorrow, March 21, 1997. MR. POSHARD further explained that the fiscal notes contained several assumptions: that all 1995 charitable, educational and religious organization that were issued permits were considered 501(c)(3)'s; and that the veteran organizations that were issued permits were 501(c)(19)'s. He discovered there were some that were designated as 501(c)(4). The division also assumed that all other 1995 organizations - IRA Native villages, volunteer fire departments, fraternal organizations, fishing derby associations, dog mushing associations, municipalities, labor organizations, non- profit trade associations, and civic or service organizations - were not designated as 501(c)(3)'s. The division, therefore, calculated that approximately 362 charities that currently had pull-tab permits would no longer be authorized to sell pull-tabs. And the total estimated loss would be about $12 million, slightly reducing the division's budget. It did not mean that the division would have 362 less reports or applications to process because many of those organizations conducted raffles as well, for example. The division, however, would see a slight reduction in its program receipts because it received a 3 percent pull-tab tax of the ideal net of every pull-tab game, and a 1 percent fee of the $12 million in proceeds. Number 1561 CHAIR JAMES stated that the fiscal note also said that the division would lose two full-time positions. MR. POSHARD replied, "Correct." CHAIR JAMES asked Mr. Poshard if the $117,000 marked on the fiscal note was the two positions? MR. POSHARD replied, "Correct." CHAIR JAMES asked Mr. Poshard if the reduction in lost revenues was expected to be $1,155,300? MR. POSHARD replied, "Correct." CHAIR JAMES replied then actually the division would only spend $117,000 less. MR. POSHARD replied, "Correct." CHAIR JAMES replied there was a bigger gap in the division's income versus its expenses. Number 1597 REPRESENTATIVE DYSON asked Mr. Poshard if the 362 groups would not be able to operate pull-tabs now because they did not qualify under the federal non-profit regulations? Number 1621 MR. POSHARD replied, "Correct." The number was an estimation based on the assumptions mentioned earlier. The current estimation was that 362 organizations would not qualify because they did not have 501(c)(3) or 501(c)(19) status with the IRS. Number 1652 REPRESENTATIVE DYSON asked Mr. Poshard if many of them would qualify if they applied? MR. POSHARD replied some would be able to qualify just by applying with the IRS, and some would not because they were not incorporated. He explained incorporation was not a requirement, currently. However, some had already received a designation, such as 501(c)(4). They would have difficulty applying with the IRS to receive a different designation because the designations were very specific. Number 1730 REPRESENTATIVE DYSON wondered if that was because their activity fell outside of the framework of the charitable non-profits. Number 1750 MR. POSHARD replied, "Correct." According to the IRS code, a 501(c)(3) was typically a, "religious, educational, charitable, scientific, literary, testing for public safety, to foster national or international amateur sports competition, or prevention of cruelty to children or animals organization." A 501(c)(19) was designated as, "post or organization of past or present members of the armed forces." Therefore, if they were not an organization that fell under those categories, they could potentially be designated in a different (c) status. Number 1786 REPRESENTATIVE DYSON asked Mr. Poshard if there would be 70 or a 100 or so of the 362 that would not qualify with their current stated purpose? Number 1798 MR. POSHARD replied it was difficult to estimate, but a majority would probably not be able to qualify. The list was being run now. Number 1819 REPRESENTATIVE MARK HODGINS asked Mr. Poshard if he had a description of the 501 designations? Number 1837 MR. POSHARD replied that he had two lists - the IRS codes and a layman's term list. Number 1850 REPRESENTATIVE HODGINS asked Mr. Poshard for a list of the 501 groupings that currently had pull-tab licenses, if possible. CHAIR JAMES explained that the division was working on the list now. She asked Mr. Poshard how soon would the list be ready? MR. POSHARD replied - hopefully - tomorrow. Number 1877 REPRESENTATIVE BERKOWITZ asked Mr. Poshard if the list included the organizations that would be affected by HB 84? MR. POSHARD replied, "Yes." The division was working on three lists: current 501(c)(3) and (19) designations that did not have pull-tab permits; 501(c)(3) and (19) designations that did have pull-tab permits; and organizations that had pull-tab permits and did not have a 501(c)(3) or (19) designation. Number 1918 REPRESENTATIVE ELTON stated that part of the problem with the bill was the suggestion that the money collected was not going where it ought to go. He asked Mr. Poshard if it was possible to see information from his office on these organizations? Number 1960 MR. POSHARD replied the division had an annual report that summarized that information. In addition, all of its records were considered public information. Each permittee was required to file a schedule E that required a list of every check that it wrote to show how it used its proceeds. Number 2002 REPRESENTATIVE ELTON asked Mr. Poshard if he went to his office and asked to see the file of the Auke Bay Volunteer Fire Department, for example, it would be available? MR. POSHARD replied, "Correct." He could look at the file to see how it spent its money, how it made its money, and/or its expenses. Number 2023 CHAIR JAMES stated that this was convoluted because of the description of the statements made by the sponsor indicating that he had another bill related to this. The question of wanting to know the contents of their file was irrelevant. House Bill HB 84 said that if an organization was not entitled to be tax-exempt from the IRS then it was not entitled to a pull-tab permit. Thus, those who would qualify and who would give money to the right places had nothing to do with the bill. Part of the requirement was that no political activities were allowed in a 501(c)(3) designation. It was also her understanding that it did not have to do with whether or not an organization was putting its money in the right places or handling its money correctly, as-much-as, it was a philosophical opinion. Therefore, anything that the committee would do to the bill would totally change the philosophical bent of the bill. "So, I think all of this other information is superfluous to the issue before us." It was not clear in HB 84 that the intent was to scrutinize how the money was being spent. Number 2140 REPRESENTATIVE ELTON replied he agreed with the interpretation of Chair James. However, before he could make a decision on the bill he wanted to know the impact on the organizations that would be excluded and on the charities that they supported. Number 2150 CHAIR JAMES replied the list that the committee members were going to get from the Charitable Gaming Division would allow him to do that. Number 2160 MR. POSHARD stated that the division could add the amount of net proceeds that each of the charitable organizations received from their pull-tab activity. It would take a little bit more time to prepare the list, however. CHAIR JAMES replied that was a good idea. She reiterated that those issues were irrelevant to the intent of the bill; however, to narrow those organizations that qualified for pull-tabs as a money making entity. Number 2208 REPRESENTATIVE HODGINS asked Mr. Poshard if it would be possible to provide how many of the pull-tab organizations used operators? Number 2223 MR. POSHARD replied it was another designation that could be added to the report. It would not be a significant amount; however, not as much as one-half. Number 2246 GERALD J. DORSHER, Legislative Officer, Veterans of Foreign Wars, was the first person to testify in Juneau. Some good points were raised today in regards to where the committee was going with the bill. The veterans of foreign wars had for some reason been designated as a 501(c)(4) when it should be a 501(c)(19). The department was pursuing the issue at this time through its mother organization. The department hoped that Representative Martin would include a 501(c)(4) during the interim of its designation as a 501(c)(19). Number 2318 CHAIR JAMES asked Mr. Dorsher if there were any other advantages for the veterans to be a 501(c)(19) as opposed to a (4), besides a pull-tab permit? Number 2331 MR. DORSHER replied, "No." The IRS designated past and present military organizations as a 501(c)(19). Number 2340 REPRESENTATIVE AL VEZEY announced that he had the definitions of the 501(c) designations. A 501(c)(19) was a special classification for veteran organizations entitling them to a tax-exempt status. The 501(c)(3) category was not just a public-welfare organization, but a tax-deductible organization. Many public welfare organizations did not try to get a tax deductible status - 501(c)(4) and 501(c)(8) - for example. Therefore, we should consider more than just the 501(c)(3) and 501(c)(19) designations. There were valid reasons to be a (c)(4) rather than a (c)(19); it expanded what could be done without jeopardizing the tax-exempt status. Number 2408 CHAIR JAMES stated that she did not want to do anything to distress the veterans. They were the most valued citizens. Number 2420 GEORGE WRIGHT, Representative, Alaska Native Brotherhood (ANB) Camp Number 2, was the next person to testify in Juneau. The ANB Camp Number 2 opposed the bill because it eliminated a lot of the gambling for villages that use it for a fund raiser. "It would completely knock the Brotherhood out." It had applied for a 501(c)(3) and (c)(8) status which had not been attained yet. The Alaska Native Brotherhood Grand Camp was a (c)(8) which covered all of the ANB camps. The bill, however, did not include (c)(8). "It's a bad bill." It simply chopped off everything else that was irrelevant, such as: how it spent its money and how it earned its money. He was part of a task force to rewrite the gaming rules and regulations and for some reason neither body had reviewed the recommendations; for example, to finance the department with extra man power so that it could go after the people.... TAPE 97-29, SIDE B Number 0001 MR. WRIGHT further said that the ANB followed the guidelines of a fraternal organization on the one hand and the guidelines of a 501(c)(3) on the other. The board members were having a hard time trying to get its certificate with the IRS. Under a 501(c)(3) designation the organization could not donate money to its members. "Well everybody in the village is somehow related and that kind of chopped them off at the knees." How do you break it up if you're all related and you started this organization and you want to give money to your son. This is a very bad bill." The ANB did like the tax-exempt portion of the bill, however. Mr. Elton established the city sales tax in Juneau to raise revenues from pull-tabs. Currently, the city taxed the gross dollar amount of sales. If a ticket sold for $1, the city would put a 4 cents sales tax on every ticket in the box. The city did not give any consideration to the price pay-outs or the play-backs. The city taxed the whole amount which was 39 percent of the ANB's profits. The ANB paid 51 percent to the city of Juneau because of its tax structure after covering the cost of business. "They refuse to recognize that the charity only controls the money that they take to the bank. They don't control the money that they pay out in prizes. That money is held in trust until somebody wins it, but they tax it." He suggested if a bill was going to be written to examine the tax structure, it would force a lot of people out of business in Juneau then Mr. Martin would not have to worry about HB 84. Number 0099 REPRESENTATIVE VEZEY asked Mr. Wright if the ANB was organized under 501(c)? MR. Wright replied the grand camp was organized under 501(c)(8). The ANB Camp Number 2 was a subordinate just like the Moose Lodges. REPRESENTATIVE VEZEY asked Mr. Wright if he would object to the bill if it incorporated 501(c)(8)? MR. WRIGHT replied he would object because some of the villages could not be that way. For example, the spring carnival in some villages were the biggest event of the year, of which, pull-tabs were used to raise money for prizes to draw the people back to the villages for the carnival. If they wanted to grandfather the bill then there would not be a problem. If they wanted to eliminate those that were not operating to the color of the law then let's take the matter to the Charitable Gaming Division and give it more investigators. "Two investigators to do 1,600 permits in the state of Alaska is quite skimpy." He suggested that the committee members look at the task force rewrites and the recommendations. Number 0169 REPRESENTATIVE HODGINS asked Mr. Wright to give him information about the Native groups and how many used operators and where were they located. Number 0184 REPRESENTATIVE ELTON commented that Mr. Wright and he had a history. The city of Juneau did apply a sales tax to pull-tabs in the same way that it applied a sales tax to a loaf of bread. The sales tax was not applied to the profit; it was applied to the sale price. Number 0200 CHAIR JAMES asked Representative Elton if she paid $1 for a pull- tab, did she have to pay $1.04? REPRESENTATIVE ELTON replied in Juneau she would have to pay $1.05. CHAIR JAMES replied she did not think that was the way it worked. REPRESENTATIVE ELTON explained the assembly recognized that $1.05 could inhibit the sale of a pull-tab rather than $1. Therefore, the assembly gave the operators an option to charge $1.05, lower the pay-out of the game by 5 cents, or absorb the cost. He could not think of anybody in town charging $1.05 now. Number 0247 MR. WRIGHT replied, "No." Playing pull-tabs was a sporadic thing. The ANB did not have a problem paying the tax on the $1 spent. It had a problem with paying the tax on the ticket that was won because generally the individual exchanged the winning amount of the ticket for more tickets. Thus, no money was exchanged; but, the city took 5 cents for each one of the tickets. REPRESENTATIVE ELTON replied the city appreciated it. MR. WRIGHT explained the Ketchikan court ruled that pull-tabs were intangible objects. It was not a retail product, nor like anything else that was sold in a store. It was an object sold with a liability - the price pay-out. Number 0304 CHAIR JAMES stated this was an interesting conversation. She did not buy pull-tabs but her husband did. It was called "fun raising" not "fund raising" at the Elks on Friday nights. She knew that he was paying only $1 for a ticket which meant that the 5 cents was coming out of the sale. It was not a tax on the person, therefore. In this case the seller paid the tax because $1.05 would be very inconvenient for the buyer. Number 0376 CHAIR JAMES announced, for the record, that Mr. Minor W. Thomas III from the Loyal Order of Moose in Juneau, was opposed to HB 84. He urged it to be defeated and asked that his letter be part of the record. "I am sorry that I cannot be there in person to testify on this bill, however please accept my gratitude for allowing me t submit written testimony. "We here at the Juneau Moose and the other lodges around the state are vehemently opposed to H.B. 84. First, why is Representative Martin excluding Sec. 501 C-8 organizations from this bill? That would include all of the Moose lodges in the state and I don't know how many other organization. "Moose lodges are organized under 501(C8) as non-profit fraternal organizations with no political ties and none allowed. We are organized under a strict members only policy and any monies made by Moose lodges must come from its members and not the general public. This includes any pull tab monies we make. It must be remembered that we support many charities with our pull tab monies as evidenced with the information packs given to Representative Elton and Hudson. Along with the information for Juneau, you could look at the Craig lodge who sent thousands of dollars back into the community. In fact, they are the major contributor to the Ambulance Corp. The Petersburg lodge donated over $100,000 back to the community last year. In Anchorage along last year $123,000 was given to charity. "With figures like these it is hard to fathom how anyone could deny 501(C8) organizations the right or privilege to sell pull tabs to its members. "If we cannot sell pull tabs who is going to fund and support the many charities. "Again, we urge that H.B. 84 be defeated. "Thank you for your time and consideration." Number 0401 REPRESENTATIVE MARTIN distributed to the committee members the report on what was happening to charitable dollars and how the money got into the political process - directly and indirectly. Number 0440 CHAIR JAMES asked Representative Martin if he would do this again after the 1998 campaign to see what the changes would be because of campaign finance reform? Number 0449 REPRESENTATIVE MARTIN replied it depended on if he was reelected. The report showed each individual candidate and how much money came in from groups that had a pull-tab permit. It also showed how much went to the political parties and then to the candidates illustrating the loopholes in the system. He cited the Home Builders Association raised a lot of money. He did not see how it was a charitable organization, however. Number 0519 CHAIR JAMES replied it was a public policy decision to determine if the organizations met the ordinary understanding of charitable issues. House Bill 84 would change it so that only recognized charitable activities would be able to be funded from pull-tabs. Number 0566 REPRESENTATIVE MARTIN replied this was just the beginning. It was not to be exclusive of anything. There was confusion with the IRS in regards to what organization was a charity. CHAIR JAMES replied she disagreed with the fact that the IRS was confused. "They tell us who is and who isn't. They aren't confused about that at all." REPRESENTATIVE MARTIN replied the IRS was confused in regards to what Alaska called a charity. CHAIR JAMES replied the IRS did not care if the state was confused because they were not confused. REPRESENTATIVE MARTIN reiterated it was confusing to the IRS in regards to what the state called charity. CHAIR JAMES replied that was none of its business. The IRS was a taxing authority and it could tax the way it wanted to and it was none of its business what the state did. REPRESENTATIVE MARTIN replied this was charity and not tax. "If you're saying in the name of charity that we're letting these people have all of these millions of dollars then we can stick our heads in the sand. We don't care if we're going to touch motherhood and apple pie." Number 0634 REPRESENTATIVE ELTON stated he understood what Representative Martin was trying to accomplish. He wondered, however, if it could be accomplished by drafting legislation that said the proceeds could only be used in a manner that would be contemplated under 501(c)(3) or 501(c)(19). Therefore, it would not limit those who could do it, but it would limit how the proceeds could be used. Number 0662 REPRESENTATIVE MARTIN replied he could have done a thousand different things. "I do take the challenge of bringing it open and they're talking about motherhood and apple pie." No one expected 1,600 people to get a pull-tab permit when almost any three or four individuals could call themselves a non-profit organization and they did not qualify for the intent of the legislation. Number 0683 REPRESENTATIVE ELTON replied this was like hunting sparrows with a shotgun. If there were legitimate purposes by the VFW, for example, that was a (c)(4) designation, the bill would get rid of it no matter how it used the proceeds. The better way to approach this would be to say what the proceeds could be used for rather than saying who could sell pull-tabs. Number 0712 REPRESENTATIVE MARTIN replied the challenge for the committee was to look and to say that Representative Martin was a complete idiot. The legislature should see what was happening with the money. "If you don't want to then vote VFW and motherhood." The Chiropractor Association was not a charitable organization, he declared. Number 0736 REPRESENTATIVE ELTON asked Representative Martin if the money went to charities then what was the difference? REPRESENTATIVE MARTIN replied the Chiropractor Association put a lot of money into the political process and it put a lot of money into its own organization; and, yes, it did contribute $250 to a little league. But, when it gained $50,000 and only gave out $250, that was not charity. CHAIR JAMES announced that the bill would be held in the committee. Number 0766 REPRESENTATIVE ELTON introduced his shadow for the day, Joel Cladouhos from Juneau Douglas High School. His unfortunate duty was to follow him around today so he was trying to make it pleasant for him. HB 143 - REPEAL ART IN PUBLIC PLACES REQUIREMENT The next order of business to come before the House State Affairs Standing Committee was HB 143, "An Act relating to the art in public places requirements for state-owned and state-leased buildings and facilities." CHAIR JAMES called on Representative Al Vezey, sponsor of HB 143, to present the bill. Number 0793 REPRESENTATIVE VEZEY stated the bill was really very simple. The co-essence of the bill was Section 3. The rest of the sections were technical requirements to implement Section 3. The bill repealed the requirements in statute for a formula program on how the state funded art in its public buildings, therefore, removing the responsibility from the legislature on how it appropriated state funds. It was not correct or proper that the legislature tried to shy away from its responsibility to appropriate. "I think if we want to appropriate money for art that we should make a deliberate appropriation. I also think that we should defer to local entities whenever possible as how they should use that money best for their communities. And a mandate in state statute is not a proper way to do state business." Number 0864 REPRESENTATIVE DYSON asked Representative Vezey if this would only save $34,000? A figure that was presented to him. Number 0883 REPRESENTATIVE VEZEY replied the bill repealed the Alaska statute that required 1 percent of the monies appropriated for public facilities that would go to the procurement of art through the Alaska State Council on the Arts. If $34,000 was 1 percent of what the state spent on public facilities, then it was correct. Number 0904 REPRESENTATIVE DYSON asked Representative Vezey if the fiscal note was zero? He stated it must cost something to administer this as a portion of the contracts. Number 0925 REPRESENTATIVE VEZEY replied this was the third time that he had introduced this bill. He had seen numerous different fiscal notes including some zeros. "I don't see this bill as saving money. I see it as returning to the legislature the responsibility and the authority of how we appropriate money." The formula absolved the legislature from its responsibility to appropriate. Number 0979 CHAIR JAMES responded she remembered the rhetoric in opposition to the appropriation for art. In her piece of legislation three years ago she tried to set up a plan to address deferred maintenance in the state which received the same rhetoric. She asked Representative Vezey if the bill made this voluntary? Number 1027 REPRESENTATIVE VEZEY replied the bill removed the statutory requirement for the formula. It left everything else. CHAIR JAMES commented she just received information on an elementary school on Eielson Air Force Base and its art work. She tallied the individual art pieces to $97,000. She did not remember what the actual cost was for the school. She asked Representative Vezey if it said "1 percent" or did it say "a percent" for art? Was it arbitrary? Where did it say 1 percent? Number 1132 REPRESENTATIVE VEZEY replied in Title 35 AS 35.27.020(c) it said, "at least 1 percent". There were a lot of questions involved, and HB 143 simply removed the statute to remove all of the questions. He did not know how the statute was interpreted, however. He also did not know how the legislature could abrogate its responsibility to appropriate because the formula was applied by the Administration and not by the legislature. Number 1173 CHAIR JAMES replied then the $97,000 related to a $9,700,000 school. She asked Representative Vezey when money was asked for a school was its price included at 99 percent plus the 1 percent for art? In addition, she asked what would the money be spent on if it was not spend on art? Number 1199 REPRESENTATIVE VEZEY replied, "Yes." A contractor usually added 1 percent to its cost-estimate of a project. The other question did not have an answer. It was up to the legislature. Number 1228 REPRESENTATIVE HODGINS commented that the state was looking at the deferred maintenance problem. He asked Representative Vezey if the law in statute also meant that 1 percent of the appropriation for deferred maintenance would have to go to art? REPRESENTATIVE VEZEY replied, "Yes." REPRESENTATIVE HODGINS asked Representative Vezey if the state would be taking away from its deferred maintenance and putting it into art? REPRESENTATIVE VEZEY replied, "Yes." That was what the formula said now. It was more complex, however, because a number of public facilities that were not considered as places to put art also had to contribute to the program. Number 1274 REPRESENTATIVE HODGINS asked Representative Vezey if the art that was actually put into a building became permanent property of that location or was it moved around? REPRESENTATIVE VEZEY replied it depended on the appropriation and who it was to. It belonged to the entity that received the appropriation and who built the facility. Number 1300 REPRESENTATIVE HODGINS commented that years ago there was discussion of putting $40 million dollars into the Homer High School which related to $400,000 in art that had to go into the facility which would have been a lot of text books. He thanked Representative Vezey for bringing the bill forward. Number 1324 REPRESENTATIVE VEZEY stated that one of the things that continued to inspire him to bring the bill forward was the fact that museums were the recipients of a large quantity of valuable art and the art had no place to go. The art could not be used as the 1 percent for art according to the regulations. Number 1358 REPRESENTATIVE ELTON replied one of the things that inspired him was art. In addition, the fiscal note from the Department of Transportation and Public Facilities indicated that the money would go to additional amenities in the building or to higher quality construction. Furthermore, he did not think that the legislature had abrogated its responsibility of the appropriation process but rather it set up a structure of what it wanted to accomplish. The bill before the committee was the best example because if the bill passed, it reestablished a change of priority instead of abrogating its responsibility. Number 1437 CHAIR JAMES replied she did not know her position on this issue because she could argue both sides. There had been art in buildings since the beginning. The difference was whether or not it should be funded by private sources or it should be taken out of a capital expense. She would argue for art as a valid thing to have in buildings. She also agreed with Representative Vezey having been to the University of Alaska's museum that had a huge amount of fine art that no one got to see. They did want to built an extension to the museum so that more of it could be put up. It was also nice to change the art instead of having the same art in place. In addition, the art in the elementary school on Eielson Air Force Base was being created to go along with who the school was named after. Therefore, the art would not have been created if the fund had not been there. Number 1578 REPRESENTATIVE BERKOWITZ replied to Representative Hodgins that there was not a mandate that all deferred maintenance receive an art funding. It only had to go to public buildings. Therefore, a building that was not being used by the public would not require a art appropriation. CHAIR JAMES replied the state had a $620 million deferred maintenance problem at the last count for schools. Number 1623 REPRESENTATIVE VEZEY replied that Representative Berkowitz was correct in that the formula did not apply to roads and bridges, but it did apply to other infrastructure that the public did not use or occupy, such as sewage treatment plants and prisons. The cost went back into the formula. Number 1646 REPRESENTATIVE BERKOWITZ explained AS 44.27.060 stated that the art requirement was exempt when the building or facility was not designed for substantial public use which would apply to a sewer plant. Number 1667 REPRESENTATIVE VEZEY replied the statute was interpreted and the way the regulations were written so that there were many public facilities where the art would not be displayed but the cost was allocated, except for roads and bridges. The one example that he recalled looking at was a sewage treatment plant. Number 1696 REPRESENTATIVE DYSON explained there was 1 percent for the Anchorage waste water treatment plant. The one unintended result of all this was the Performing Art Center in Anchorage. It was all for art and it had to have 1 percent set aside for art which he felt was an unfortunate restriction and he would have loved to have spent the money on handicapped access, for example. Number 1833 JOCELYN YOUNG, Curator of Public Art, Anchorage Museum of History and Art, was the first person to testify via teleconference in Anchorage. There was disinformation and misinformation about this law. The municipal ordinance followed the state statute. In addition, the museum had found that the this was one of the most public processes. There was at least one or two people from each facility, the architect, community members and members of various commissions within the municipality on the committee. Therefore, there was ownership of the art for the people living and working in the building on a day-to-day basis. She had also seen those that were not very excited about this usually embrace it after seeing how their organization could be represented in the public. She cited the art piece in the Anchorage police headquarter training center became the logo for the department adding a light touch to its serious role. In addition, the artists in the state receiving the commission did not receive a chunk of money because they had to pay for: studio rent, contractors, and electricians, for example. The money did not just go to one person. The rural school did not have a 1 percent commission, they had a 0.5 percent commission. She had also found that the public art throughout the state was considered a museum without walls because it was accessed by those that often did not have a chance to go to a museum. "It becomes there own public art in their own community or school." Number 2069 DAVID ROSENTHAL was the next person to testify via teleconference in Cordova. He was against repealing the 1 percent for art. He had done some art for the state in the past which was meaningful to him to pass on. He did not believe that by getting rid of the 1 percent for art the legislature would take care of its $600 million in deferred maintenance or provide wheelchair access. "I don't believe it's going to save any money and it has been a good thing for the state." It brought the art to people who normally did not get the chance to see it. In addition, a wide range of art was selected because of the public process. Number 2153 SCOTT HAMANN was the next person to testify via teleconference in Kenai. He supported HB 143. Art had been in public buildings from the day that they were built and by getting rid of this 1 percent for art did not mean that there would not be art. It was a continual process. However, he did not believe that there should be a blanket 1 percent. "I think that we need to sit down and look at every building that we build and decide how much money we want to spend on art and go ahead and do that." The art could come from private individuals or it could be donated. It was the responsibility of the legislature to be frugal with state money. The money could be better spent. Number 2269 VICTORIA LORD, Director, Ketchikan Arts Council, was the next person to testify via teleconference in Ketchikan. She thanked Representative Vezey for bringing us together every year to reaffirm the importance of the 1 percent for art program in Alaska and for giving us the opportunity to remind the legislators that the program was of value. She disagreed with Representative James that art just belonged in museums. Art was all around, it added life and livability to the public spaces. The residents of the City and Borough of Ketchikan enjoyed fine works of public art and many were here because of the state mandate. She cited the airport, pioneers home, public health center, and public schools housed a variety of art work by a variety of artists. Ketchikan was proud of the work of its artists that had received commissions not only in Ketchikan but throughout the Northwest. She cited the names of the artists who contributed art to the new buildings that fell under the mandate. As Director of the Ketchikan Arts Council, she had witnessed the process of selecting the art work. When it was time to select the art work for the high school the process included the students. Number 2439 EMILY MOORE was the next person to testify via teleconference in Ketchikan. She was a senior at Ketchikan High School. The 1 percent for arts funding was very important. Her freshman year began in a brand new building which was nice, but it represented a sterile bathroom. The funds from the 1 percent for arts was a good program. TAPE 97-30, SIDE A Number 0018 MICHAEL OLSON, President, Seward Arts Council, was the next person to testify via teleconference in Seward. He was also a volunteer member of the arts selection committee for the new ferry. He explained the administration cost came from the 1 percent. And the formula was only calculated from state funds. He opposed HB 143. In 1975, Alaska took bold steps to recognize the importance of art by developing the 1 percent for art program. Since that time many other states had followed and looked up to us. The state of Utah was the most recent to adopt such a program. It would be ludicrous for the state to drop the ball now. The 1 percent would not go back to the General Fund because contractors factored in a 5 to 10 percent contingency for cost overruns and it was this money that the art work was derived from. If money was the sole reason for HB 143, it was a waste of precious time; there was no bang for the buck. In 1985, he worked on a project where there was a cost overrun so 1 percent could not go into the art. Other funds were raised after the fact. Number 0233 ANNIE STOKES was the first person to testify in Juneau. She also thanked Representative Vezey for bringing up this issue again because it stimulated public dialogue, and it made people really assess what was important to them. It was apparent from the comments from the committee members that there was a great deal of misinformation, confusion, and questions about the bill that no one had the answers to. She was opposed to HB 143 because it was not in the best interest of the state. It was premature as was shown through the questions. In addition, governmental policy was to bring up a problem, to investigate it, and then to act accordingly. She reiterated the bill was premature at this point because there were too many questions. Moreover, HB 143 denied the individuals that wanted to see their cultures reflected in the public. It was a public process and those involved had only said positive things statewide for the program. The artists were selected by the area. It was a competitive process with stringent procedures to go through. It also denied the children in the schools who assist with the projects and watch the process. She cited the art work in Dzantik'l Heeni Middle School in Juneau. In addition, it also denied the tourists who came to see the land and to buy art. The figures indicated that art was a viable industry that should be supported by the state just like natural resources. Number 0485 SHANNON PLANCHON, Grant Administrator, Alaska State Council on the Arts, was the next person to testify in Juneau. She was also the Percent for Art Coordinator. She distributed to the committee members a handout titled, "Percent for Art-Samples of Percent for Art Projects From Across the State." She explained Tim Wilson was not here today because he was travelling. The council was opposed to the passage of HB 143. Public art had been commissioned since the antiquities. "It was one of the important ways that we come to know and identify our cultures, our buildings, and who we are." There were over 100 percent for art programs operating in the United States: the federal government, 29 states, and scores of cities. Anchorage was the only city in Alaska that had a full-time percent for art person. At the state level the council operated without a direct administrative expense offering technical services to departments that were required to consult with the council per the statute. In 1986 the Visual Arts Coordinator position was cut from the program. The council had a strong interest in the 1 percent for art program because it served its constituents and the public. "We think it's an ideal program, fiscally conservative, while the state's budget is robust. A small percent of the capital budget is reserved for it and then when times are tough the projects are cut back." In addition, art installed became a permanent part of the building and amortized over the life of the building. The Art in Public Places Fund was a different pot of money. It was for buildings that were not used by the public. The portion that was designated for the art went to the fund to help augment art in the art banks for portable art. The fund right now was at $34,000. In conclusion, HB 143 would negatively affect its two constituencies, the public and the artists. "Public art is public pride." Number 0723 ALAN MUNRO was the next person to testify in Juneau. He was a practicing artist in Juneau. He read the following statement into the record: "Art, as painting and sculpture, has made major contributions to public life and public buildings since the time of the Egyptians, Greeks and Romans. We continue in that historic tradition to this day. "Now, there are certain politicians who would say: `No more!' "What is the reason? What good purpose could possibly be served by eliminating art from our daily lives? Is this an anti-art, anti- intellectual movement or is it simply naivete', due to too little opportunity to experience meaningful art. Perhaps it is purely a financial issue, fueled by contractors who would stand to profit by a little extra money designated for `nice but not necessary' art. "Supporters of the repeal say: `It is a government give away which merely supports individual artists who can not make it on their own.' This is a ridiculous argument, since any money left over after materials, hard earned wages and taxes would have to last a very long time between awards. There is no give away here, just an honest wage in return for talent, professional ability and public enrichment. We will never know how far Michelangelo would have been able to go without the financial support of the Vatican. He also had trouble with individuals in control of that funding source, over 400 years ago. "Be that as it may, there does exist a long established art selection process that very carefully selects the percent for art recipients. This ensures that , serious artists, producing quality works of art, are awarded these percent moneys. "We, of European descent, tent to isolate art from our daily lives whether we profess to appreciate it or not. Older and wiser cultures accept art as a given in their daily lives. Art provides them a dimension of societal well being they would otherwise not have. Obviously, we have a long way to go before we are as accepting or as wise. It is one of the reasons why we are gathered here today. "Madam chairwoman, I recommend we become more accepting of art. Let us continue on the centuries long journey other have made before us. Let us continue this critically important percent for art program. Let this sadly uninformed and regressive bill die in Committee." Number 0906 MIKE ANDERSON was the next person to testify via teleconference in Cordova. He was a local artist in Cordova amongst the other things he did for his community. The art created under the percent for art program added a great deal to the buildings. It also added public pride and warmth. It also allowed for the preservation of culture and the creation of art that otherwise would not have been created on speculation because of to the size of the art work. "Without these commissions the artists would be relegated to doing small enough things that would fit in a tourist package and heading out of the state." The work that he did for the percent for art project was specifically designed in relation to the durability and function of the building. Furthermore, he also had worked in the field of construction. "I know that this will not save 1 percent." Money going into the windows, for example, was far more than 1 percent. The 1 percent of the 10 percent contingency for bidding errors and necessary changes was eaten up in no time in the construction of a building. "I don't think we're going to see any change in this. We might see a little bit more spendy tile on the floor. We might see spendier doors, maybe slightly more glass. We won't hardly see it at all in the buildings." In addition, the 1 percent would not go back to the legislature. "You're not going to get the warmth of putting artists out of business. The artists that are already doing this are artists that are going to make it regardless of whether they're getting a percent for art or not." Number 1076 JAMES EVENSON was the next person to testify via teleconference in Kenai. He called HB 143 a bad bill because there was no better investment than money spent on art. The program was not welfare for artists, it was not just a matter of putting pretty pictures on the wall. It was a statement by the government that the art was important for the lives of the citizens. Everything that was made by the hands of man had an artistic decision. He cited cars, tools, and houses as examples. "Art is part of the fabric of our daily lives. It's just as much so as science or even the oil industry." Therefore, to eliminate the percent for art program meant diminishing the quality of life for our people in the schools and public buildings. He suggested to continue to try to improve the program for more involvement. "Please do not eliminate this program." Number 1178 CARL KRONBERG was the next person to testify via teleconference in Ketchikan. The art in public requirement was an important and positive program for the Ketchikan community. The most recent example was the placement of art in the Ketchikan High School. The school had been recently rebuilt and the art requirement made it a more cheerful place for the teachers and the students creating a better educational environment. The art requirement was also a valuable public partnership for very little money creating economic benefits for local communities in tourism, for example. Number 1267 CAROL BRYNER was the next person to testify via teleconference in Anchorage. She was an artist and a volunteer at the museum as well as having served on juries for the public art program in Anchorage. She travelled quite a bit and looked at how communities showed itself in its art. There was a big difference between Seattle, Washington; and Taunton, Massachusetts for example. Last year at this time she was in Italy where there were lines three hour long to see art, of which, a lot of it was public art. The bill was a shortsighted way to look at the future and what we would leave to our children and grandchildren. "The art that we have around us is incredibly important. If you look around you and see nothing but new roads and new bathrooms; it doesn't say much about our culture." She was opposed to HB 143. Number 1353 SYBIL DAVIS was the next person to testify in Juneau. She had lived in Juneau for a long time. She was also a parent and a person who had been actively involved in the arts and who appreciated aesthetics. She cited a story when she was seasick on a missionary trip and the skipper suggested that she focus on the horizon to help her seasickness. She suggested that the committee members focus on the horizon now to realize this was something that would be left long after they were gone. Art was a positive impact on the environment, it was the culture, it reflected the people, and 1 percent was not much. If the bill was to pass and the money was rescinded, it would not go into the capital budget, it would not get what the committee members were seeking. She was opposed to the bill. Number 1421 LYNETTE TURNER, President, Arts for a Healthy Alaska (AHA), was the next person to testify in Juneau. The AHA was a statewide arts advocacy organization. The AHA opposed HB 143 because both the public and the artists benefitted greatly from the program. The schools and universities would be negatively impacted because so many of the projects were done there. In addition to decreasing the degree of exposure that the youth would have, it would also affect artist's employment. "To walk through a public building and have the opportunity to be exposed to various types of art can be a rewarding experience and can have a profound affect." In the words of playwright, Thornton Wilder, "We can only be said to be alive in those moments when our hearts are conscious of our treasures." The arts were a treasure that should be shared. Please support the 1 percent for art program. Number 1480 JENANN KIRCHMEIER was the next person to testify via teleconference in Cordova. She was a practicing artist in Cordova. She had not been a part of the program but was opposed to eliminating the percent for art because she felt it was a form of bankruptcy to look at art in this way when it was such a life enhancing form. She looked forward to buildings going up so that she could see what would happen in them. In addition, she had seen first hand in the villages how the children responded to the art in their schools. She was opposed to eliminating the 1 percent for art program. ADJOURNMENT Number 1540 CHAIR JAMES adjourned the House State Affairs Standing Committee meeting at 10:05 a.m.