Legislature(2003 - 2004)
04/14/2004 01:41 PM Senate HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 383-CHILDREN'S TRUST GRANTS
The committee took up SB 383.
MS. MARGO McCABE, Alaska Children's Trust (ACT) Fund Board,
testified from Anchorage and explained the four key provisions
in the bill. The first eliminates the $50,000 cap that
currently exists in granting awards to potential grantees
seeking funds for programs eliminating child abuse and neglect
in Alaska; the second requires that the project include a plan
for self-sufficiency and program maintenance; the third limits
funding to four years; the fourth allows the board to
discontinue grant awards when outcomes are not being achieved.
SENATOR LYDA GREEN referenced page 2, line 10 that says, "75
percent of the first-year..." and asked where in the bill the
$50,000 cap was removed.
MS. McCABE confirmed that the $50,000 provision is being
repealed.
SENATOR GREEN asked if the whole section is being repealed.
CHAIR DYSON noted this was Section 2.
SENATOR GREEN asked why it's necessary to go from 50 to 75, and
wondered if the intent is for the grant to become the sole
support for this program, or if the project has energy of its
own to create something that's being matched or added to.
MS. McCABE explained that one component is to eliminate the
$50,000 cap. Potential grantees can ask for a small size grant
in the amount of perhaps $5,000, or in an amount in excess of
$50,000. Second, it relates to self-sufficiency. The first
year, a grantee can apply for funds to cover up to 75 percent of
program costs; in the second year that amount can be 50 percent;
in the third and fourth year that can be 25 percent. In
addition, ACT is asking that there be a sustainability plan from
the start in order to ensure that the entities have plans
substantiating that the programs don't go away after the funding
stops. This provides for greater flexibility in choosing the
recipients of grant awards.
SENATOR GREEN asked what might be the maximum amount given to a
single entity if there isn't a cap.
MS. McCABE said it varies in different states. The average
grant across the country is about $50,000. The current board
favors continuing to fund the smaller grants. There are
opportunities to fund larger programs, as seen in other states.
She mentioned Missouri as recently having an average grant size
of $100,000 to 17 family-resource centers. She reiterated that
a maximum or minimum amount is not being proposed so that
greater flexibility can be achieved.
SENATOR GRETCHEN GUESS confirmed that while this might be the
intent of the current board, it sets a precedent so that there
could be a grant for $250,000 at some future time. That isn't
the intent of the trust or statute, but it would be allowed with
this change.
MS. McCABE responded that the current board's thinking "is not
that" and that while concern regarding what future boards would
do is necessary, this legislation would open the door for
private foundations to give larger amounts of money that could
then be turned around to larger programs. She said the board
would have to exercise due diligence in making sure that the
right amount of funds go to the programs most effective in
combating this problem. She said the current board is capable
of making such decisions, and she hopes the same will hold true
with future boards.
SENATOR GREEN asked her to repeat what she said about private
foundations.
MS. McCABE said, for example, if a private foundation chose to
give $100,000 but indicated that the money needed to be spent by
the end of the year, or there was some condition on it, it would
be hard to break that into smaller grants and turn it around
quickly. This legislation would allow for the flexibility to
issue a larger grant. She informed members that a $600,000
appropriation could be coming to the fund in this cycle. The
monies would have to be spent relatively soon - possibly by
September - and the goal would be to spend the money on small
community-based programs but also to invest in a media campaign
or some other larger program that could help combat the problem
of child abuse and neglect. She said that is just one example,
and the hope is that over the next few years, part of the
strategic planning process would be to attract larger sums of
money from different entities including private foundations, and
perhaps the federal government.
SENATOR GUESS asked if the current funding of the trust, besides
fund raising, comes from interest payments from the principal
that was invested somewhere in line with the permanent fund.
She questioned whether $600,000 could be deposited in the
principal so that the board could use the interest from that to
fund programs.
MS. McCABE said that wouldn't be possible in this particular
case because the money is to be spent in this fiscal year, in
the federal government's current appropriations cycle. She
thought specific language in that particular allocation says it
can't be added to principal, but needs to be spent on programs.
She said it could be that future appropriations or donations
from private trusts are not worded that way.
SENATOR WILKEN said he had three questions, and he began by
asking whether the trustees support SB 383 because they are
referred to obliquely in the sponsor statement.
MS. McCABE responded that the current board of the ACT fund
supports the bill. The thinking is that it provides greater
flexibility to the board in the grant-giving process, and allows
for more responsiveness to community needs and allows for grants
of all sizes. Particularly, the pieces that require the
sustainability plan and the ability of the board to discontinue
grants if objectives aren't met will help to ensure that monies
are being spent appropriately on programs that will help to end
this problem.
SENATOR WILKEN asked how the trust has interfaced with other
funding sources, for example the Rasmussen Foundation. He said
he was going to request a letter regarding another issue;
perhaps the answer to that question could be included in the
letter. He then asked how the Children's Trust money has been
leveraged in the past to access other capital pools.
MS. McCABE asked if he wanted her to respond at this time.
SENATOR WILKEN said no, but that since SB 383 was going to
Senate Finance, he would appreciate an answer at that time along
with the letter having to do with the '05 grants. He expressed
concern as to why the '05 grants haven't yet been designated.
That was brought to his attention from folks in Fairbanks, he
said. He wrote a letter to the commissioner about a month ago
inquiring as to the status; he asked Ms. McCabe to follow up on
that letter so that when the bill comes to Finance, she could
provide him with an answer as to the status of the '05 grants,
the intent of the department, and the answer to the leverage
issue.
MS. McCABE agreed to do so.
SENATOR GREEN asked if the entire funding package of the
Children's Trust goes through the regular process with the
capital budget or if it's possible to dispose of and award
grants outside the legislative budget process.
SENATOR WILKEN said he believes it is outside of the budget
process and it's not in the capital or operating budgets. He
asked Ms. McCabe if this is correct.
MS. McCABE said the fund is a separate entity and that "we spend
the net income of it."
SENATOR GREEN said she has seen a report for the year after it
came back, so she would also like an updated report of what
happened in the last two years.
SENATOR WILKEN asked if the status of grants in the last couple
of years would be available.
MS. McCABE said absolutely, that the annual report was just
prepared. She said she had the information available, but was
happy to put it in letter format with additional detailed
information on the grants for the Finance Committee.
SENATOR WILKEN said he would also pass that information on to
people in Fairbanks who expressed the concern.
CHAIR DYSON noted Senator Wilken's presumption that SB 383 would
pass out of committee today was probably true. He said if or
when it gets to Finance, he would enjoy a list of the
recipients. Since President Bush and Alaska's administration is
so interested in involving the faith-based community in
providing human services, he was particularly interested to see
if the Children's Trust has involved folks from those
communities, or not.
SENATOR GREEN asked if there were enough applicants to fill the
$600,000 request, or if they were not up to par.
MS. McCABE said unfortunately the money has not yet been
received. If it comes, it would be in June or July because of
delays in Congress in passing appropriation bills this past
year. Because the fiscal year ends around September, those
funds would need to be spent by then. In that 3-month period,
an RFP would need to be submitted, and potential grantees would
need to respond. There could be a lot of responses from
different entities for smaller projects, and there would be
support for those if they met the objectives. She expressed
wanting to retain flexibility to work on some larger projects.
A media campaign is a very interesting project because it could
heighten awareness of the problem, and provide a resource for
people to turn to. She noted that Rebecca Parker reminded her
that the media campaign could be used to leverage obtaining
additional funds into the trust by promoting the trust itself,
and making it known that contributions are accepted.
SENATOR GREEN asked if the $600,000 is from federal dollars.
MS. McCABE said yes.
SENATOR GREEN said very often there is a waiver provision or an
extension, and wondered if this was a possibility.
MS. McCABE said they would pursue that. The board didn't
actively solicit these monies and they are trying to figure out
how to work with and use them and make sure they are meeting the
requirements if those funds materialize. In the next couple of
years, the strategic plan includes becoming more proactive in
looking for monies like this from private foundations and other
entities. The board is trying to understand the process right
now.
SENATOR GREEN asked, "Have you put the word on the street that
this is a possibility?"
MS. McCABE said, "No, we haven't wanted to disseminate that
information until we're sure it's going to be deposited in the
fund."
SENATOR GUESS referred to Section 1, line 4, "the net income of
the trust" and mentioned the use of the interest off of the
trust. She asked why the $600,000 couldn't go to the principal,
but "that's not net income, that would be outside of that." She
asked if the Children's Trust couldn't use that money for the
media campaign because it has to award a grant to someone else
for that media campaign, and that campaign has to have a self-
sufficient proposal. If the grant comes through, she said she
was confused whether the Children's Trust or a grant recipient
would do that media campaign, and how such a large media
campaign would be sustained over time.
MS. McCABE responded that the board hasn't decided where that
money might go, but she thinks it would go toward small
community-based grants as well as something like a media
campaign. In current statute, there is some leeway in spending
money to promote the fund. Also, there are other organizations
interested in this idea that could be a grant as well. Like the
tobacco prevention campaign, which was an alliance of a number
of different entities, and was funded in part through grant
monies. It could go that route as well. She advised that they
would meet on April 30 to review the current grant and to
address some of these issues.
CHAIR DYSON agreed that Senator Guess's question regarding the
language on page 1, line 4, "In awarding grants from the net
income..." allows them to be a pass-through agency for grants
authorized for other organizations. He said what the trust
wants to do is probably fine, in general. He could argue that
Senator Guess's concern could be better dealt with in Finance,
so the bill could either be passed along to deal with that
issue, or it could be set aside and addressed on Friday while
the language gets fixed. He asked Senator Guess for she
opinion.
SENATOR GUESS noted that neither she nor Senator Davis were on
the Finance Committee.
SENATOR GREEN read from AS 37.14.200, "the principal of the
trust consists of legislative appropriations to the trust and
gifts, bequests, and contributions of cash or other assets from
a person" and asked if the government could be considered as a
"person" and said this implied that the contribution would go
into the principal. This needs addressing, she said.
CHAIR DYSON asked Kaye Saxon if she would speak to this concern.
MS. KAYE SAXON, Alaska Children's Trust Board, testified from
the Mat-Su and emphasized that removing the $50,000 cap will
allow flexibility regarding the monies they do have. She said
there are many new trustees on the board who were trying to find
their footing and determine parameters.
CHAIR DYSON suggested that Senator Guess was correct in assuming
that the $600,000 could not be used as a pass-through, so
perhaps the trust board could propose an amendment that could be
addressed in the Finance Committee.
SENATOR BETTYE DAVIS suggested this issue be dealt with in the
Finance Committee.
CHAIR DYSON stated that Senator Guess raised an excellent
question.
SENATOR DAVIS moved to report SB 383 out of committee with
individual recommendations and the accompanying zero fiscal
note(s).
CHAIR DYSON asked if there was any objection. Seeing and
hearing none, it was so ordered.
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