Legislature(2005 - 2006)SENATE FINANCE 532

04/25/2005 09:00 AM Senate FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 133 AVIATION ADVISORY BOARD TELECONFERENCED
Moved SB 133 Out of Committee
+ SB 150 ALASKA CHILDREN'S TRUST FUND GRANTS TELECONFERENCED
Moved CSSB 150(HES) Out of Committee
Bills Previously Heard/Scheduled
+= SB 151 DECOUPLING FROM FED TAX DEDUCTION TELECONFERENCED
Moved SB 151 Out of Committee
+= SB 71 NONUNION PUBLIC EMPLOYEE SALARY & BENEFIT TELECONFERENCED
Heard & Held
                                                                                                                                
     SENATE BILL NO. 150                                                                                                        
     "An Act repealing the limits on grants awarded from the Alaska                                                             
     children's trust fund."                                                                                                    
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
JASON  HOOLEY, Staff  to Senator  Fred  Dyson, Chair  of the  Senate                                                            
Health, Education and Social  Services (HESS) Committee, stated that                                                            
the HESS  Committee  sponsors  this bill  by request  of the  Alaska                                                            
Children's  Trust Board of  Trustees. The  Trust was established  in                                                            
the late 1980s  as a means through  which to fund programs  designed                                                            
to  "combat  child  abuse".  The  Board   of Trustees   is  "seeking                                                            
additional  flexibility"  in the administration  of  the program  in                                                            
regards to  the awarding of Trust  grants. To that point,  Section 1                                                            
of this  bill  would require  grant applicants  to  include a  self-                                                            
sustainability  plan in their proposal. Section 2  of the bill would                                                            
eliminate  the current annual  $50,000 grant  limitation; would  re-                                                            
define the  current grant  funding formula;  and would specify  that                                                            
the grant award  be limited to four-years in an effort  to guarantee                                                            
that the grant  would be recognized  as seed money for the  program.                                                            
Section 3  would reinforce  the conditions  specified in Sections  1                                                            
and 2 by allowing the Board  to reduce or eliminate an awarded grant                                                            
based on the performance of the grantee.                                                                                        
                                                                                                                                
Co-Chair Green,  noting that this  grant process was revised  within                                                            
the last four  or five years, asked  the reason for the need  to re-                                                            
address the process.                                                                                                            
                                                                                                                                
Mr. Hooley deferred to  Margo McCabe of the Alaska Children's Trust.                                                            
                                                                                                                                
MARGO MCCABE,  Chair, Board  of Trustees,  Alaska Children's  Trust,                                                            
testified  via teleconference  from  Anchorage  and commented  that,                                                            
while the  assets of  the Trust  Fund currently  exceed ten  million                                                            
dollars, the  Trust could only expend  its annual net income  of the                                                            
Trust Fund to  fund the entirety of child abuse programs  statewide.                                                            
In the last few years,  the amount of available funds was a limiting                                                            
factor as the  income was only sufficient  enough to fund  recurring                                                            
grants.  Therefore, "the  intent of  this legislation  is to  limit"                                                            
funding for  those grants so that  money would be available  to fund                                                            
"new innovative" programs.                                                                                                      
                                                                                                                                
Co-Chair Green asked which  current formula language must be changed                                                            
in order  to accomplish  this goal;  specifically  why the  proposed                                                            
formula is to  establish a sliding scale award of  75-percent of the                                                            
program's first year's  expenses the initial year, 50-percent of the                                                            
program's  first-year expenses  the second  year, and 25-percent  of                                                            
the program's first-year expenses the third and fourth years.                                                                   
                                                                                                                                
Ms. McCabe stated that  the proposed formula changes would establish                                                            
parameters that  would allow the grantees to become  self-sufficient                                                            
at the termination  of the four-year  period. This would  also allow                                                            
Trust funds to become available to fund other programs.                                                                         
                                                                                                                                
Co-Chair Green asked how many $50,000 grants have been awarded.                                                                 
                                                                                                                                
Ms.  McCabe responded  that,  due to  budget constraints,  the  most                                                            
recent  Request for  Proposals (RFP)  grant awards  were limited  to                                                            
$30,000.  Approximately half  of the applicants  applying  requested                                                            
the maximum $30,000  amount, and four such grants  were awarded. The                                                            
Trust would be issuing its next RFP shortly.                                                                                    
                                                                                                                                
Co-Chair Green noted that  current State Statutes limit the award to                                                            
$50,000.  She was curious  to the  number of grants  that have  been                                                            
awarded at that level.                                                                                                          
                                                                                                                                
Ms. McCabe  did not have  that data available  as the $50,000  grant                                                            
level  was last  awarded prior  to her  being on  the Board.  Recent                                                            
annual award levels have been limited to $30,000.                                                                               
                                                                                                                                
Co-Chair Green  asked the Commissioner  of the Department  of Health                                                            
and  Social  Services  to explain,  for  the  record,  the  specific                                                            
formula change included in the Senate HES version of the bill.                                                                  
                                                                                                                                
JOEL  GILBERTSON,  Commissioner,  Department  of Health  and  Social                                                            
Services, pointed  out that the most  substantial formula  change in                                                            
that version  of the bill  is the four-year  grant award  limitation                                                            
specified in Section  2. Current State Statute does  not specify any                                                            
limitation  on the length of a grant  award. While current  language                                                            
does include  a sliding  scale award  level, once  the lowest  award                                                            
percentage  is  reached,  it  could  be  awarded  indefinitely.  One                                                            
program  recipient  is receiving  its eighth  year  of funding.  "No                                                            
grants are  transitioning  off", therefore  no new grants are  being                                                            
awarded,  as there is  a finite  amount of money  available.  No new                                                            
programs have received  grants in the last two years. The net income                                                            
for the program  is projected to continue at the current  level and,                                                            
unless programs are cycled  out, funds to support new programs would                                                            
be unavailable.  Therefore,  the four-year  provision would  provide                                                            
the Trust the  ability to transition from "continuation  funding" to                                                            
being able to fund new programs.                                                                                                
                                                                                                                                
9:30:19 AM                                                                                                                    
                                                                                                                                
Co-Chair Green  stated that she had participated in  the development                                                            
of  the  previously  adopted  language.   While  the  sliding  scale                                                            
language  in the bill was  intended to halt  continual funding,  the                                                            
changes  being  proposed  in this  legislation  would  "correct  and                                                            
clarify" that a program  would receive a sliding scale percentage of                                                            
funding that  would terminate  at the end  of the fourth year.  This                                                            
would provide  the opportunity  for new programs  to be funded.  The                                                            
intent of the Trust funds  is to provide "a boost but not a lifeline                                                            
support system".                                                                                                                
                                                                                                                                
Commissioner  Gilbertson  affirmed   that that  the  intent  of  the                                                            
original  Trust  language  was  "to  have  the  grants  move  toward                                                            
sustainability  plans  and  to  transition  off after  a  four  year                                                            
cycle".  However,  the four-year  cycle  language was  omitted  from                                                            
State Statute.                                                                                                                  
                                                                                                                                
9:31:09 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green asked  whether  this  legislation would  affect  the                                                            
maximum award amount.                                                                                                           
                                                                                                                                
Commissioner   Gilbertson   stated  that   this  legislation   would                                                            
eliminate  the maximum limitation  amount on  the grants awarded  by                                                            
the  Trust.  The annual  net  income  available  would serve  as  "a                                                            
natural cap".                                                                                                                   
                                                                                                                                
Co-Chair  Green concurred,  but  stated that  the  Trust should  not                                                            
award the entirety of its funds to a single program.                                                                            
                                                                                                                                
Commissioner Gilbertson  stated that other factors would prevent one                                                            
entity  from receiving  the entire  amount of  available funds.  One                                                            
deterrent  to that would  be the fact that  existing grants  must be                                                            
honored until they transition out of their four-year cycle.                                                                     
                                                                                                                                
Co-Chair Green asked whether  the number of program applicants might                                                            
diminish  once  the  current  recipients  conclude  their  four-year                                                            
cycle.                                                                                                                          
                                                                                                                                
Commissioner  Gilbertson  responded that  one of  the circumstances                                                             
constantly encountered  in grant programs is "that areas most in the                                                            
need of the  programs and programs  that are most in need  of coming                                                            
into their communities  are often those that are the  least prepared                                                            
to  submit a  good  grant application".   Typically the  areas  that                                                            
submit good applications  "are areas that are resourced enough". The                                                            
challenge, therefore,  is how to make those communities  that do not                                                            
have  grant writers  or the  resources  with which  to compete  with                                                            
larger organizations more  competitive. The proposed structure would                                                            
require  the  formation   of  a  sustainability  plan,  performance                                                             
measures, and would include  the Trust's involvement in the process.                                                            
This,  combined  with  the  phased  four-year  maximum  grant  award                                                            
limitation,  would allow  a natural  transition  process that  would                                                            
provide the  opportunity for  programs that  are on "the  peripheral                                                            
now" to get into  the system and receive some start-up  funding. The                                                            
existing programs  are good; however, as was the original  intent of                                                            
the Trust  grant program,  they need to  become self-sustaining  and                                                            
allow other programs to benefit from the grant program.                                                                         
                                                                                                                                
Co-Chair Green  asked whether the language authorizing  the Board to                                                            
reduce or discontinue  an awarded  grant, as included in  Section 3,                                                            
is a revision of current language.                                                                                              
                                                                                                                                
Commissioner  Gilbertson clarified  that Section 3 is new  language.                                                            
                                                                                                                                
9:33:54 AM                                                                                                                    
                                                                                                                                
Commissioner Gilbertson  stated that Section 3 would allow the Trust                                                            
to  discontinue  or  reduce   funds  were  a  program  to  not  meet                                                            
performance standards.  When he initially participated in the Trust,                                                            
the quality of  the data being collected on the grants  disappointed                                                            
him. The  Board is  addressing  performance standards  in a  serious                                                            
manner as reflected in  the forthcoming RFP specifications. "Outcome                                                            
data" would become more of the focus in the future.                                                                             
                                                                                                                                
Co-Chair  Green supported  this direction,  as it would provide  the                                                            
Board the oversight  authority required to ensure  that the programs                                                            
being conducted support  the mission of the Alaska Children's Trust.                                                            
                                                                                                                                
Commissioner  Gilbertson affirmed  that the Board and the  Trust are                                                            
"in agreement"  that "a better tool  and a better reason  for why we                                                            
approve a grant  or why we discontinue it" is required.  The outcome                                                            
data, similar  to the State's  Missions and  Measures policy,  would                                                            
allow the program's performance  to be measured to insure that Trust                                                            
funds  are used  in the  most efficient  and effective  manner.  The                                                            
bill's  language would  also  allow for  program  expansion for,  as                                                            
recipients  cycle out, funding  would become  available to  fund new                                                            
grants.                                                                                                                         
                                                                                                                                
Ms. McCabe  voiced appreciation for  the discussion. It covered  the                                                            
important aspects of what the bill would do.                                                                                    
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal note.                                                                        
                                                                                                                                
There  being  no  objection,  CS  SB  150(HES)   was  REPORTED  from                                                            
Committee  with previous zero  Fiscal Note  #1, dated April  5, 2005                                                            
from the Department of Health and Social Services.                                                                              
                                                                                                                                
AT EASE 9:36:24 AM / 9:37 AM                                                                                                  
                                                                                                                                

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