HOUSE BILL NO. 231 "An Act relating to the definition of 'municipality' for purposes of human services community matching grants." REPRESENTATIVE PEGGY WILSON explained that HB 231 addresses human services community matching grants, which total about $1.2 million annually. Qualified communities have to provide a 35 percent match to receive a grant, and only three communities are now qualified. This bill would make it possible for other communities to form consortiums to pool money to receive these grants. Any group of communities totaling 35,000 could apply. She referred to a Talking Points handout (copy on file.) It is not the intent of the bill to take away from the original three communities. The deadline for applying for these grants is October. She described the process, which would not go into effect until 2007. The Southeast Conference would assist in the development of consortiums. 3:17:43 PM Co-Chair Meyer asked for clarification of the intent of the bill. Representative Wilson repeated that it is not the intent to take away services from anyone else. Representative Croft asked about geographic area definitions. Representative Wilson replied that the geographic areas were purposely not defined. Representative Croft asked whether diverse areas could apply. Representative Wilson said that is fine. Representative Croft asked if the bill might delay harming communities receiving current services. Co-Chair Meyer clarified that the intent is to increase the amount appropriated in the future. 3:20:49 PM Representative Hawker related that there is no intent to take funding away, presuming the same level of funding is maintained. He suggested that more funding would be needed in the future. Representative Wilson said that decision would be made in a HESS subcommittee. Representative Hawker disagreed with the zero fiscal note. Representative Wilson referred Representative Hawker to the second page explanation of the fiscal note. Co-Chair Meyer suggested another option. Representative Wilson said some of it has already been done. 3:22:40 PM Representative Joule asked about population requirements. Ms. Wilson implied that the numbers could be changed. 3:24:25 PM MARLEEN NORTON, HUMAN SERVICES, MUNICIPALITY OF ANCHORAGE, ANCHORAGE, (via teleconference) spoke to the user's matching grants. She requested that sufficient funding be provided for services. 3:27:18 PM ROB ALLEN, SOUTHEAST CONFERENCE, SITKA, (via teleconference) spoke in support of the legislation. It adds an additional category to the definition of areas that would be eligible to receive state grant funds for human services. He pointed out that the population of Southeast Alaska is declining and fewer contributions are flowing to nonprofits from businesses and communities. He urged passage and support of the bill. 3:30:14 PM JANET CLARKE, ASSISTANT COMMISSIONER, DIVISION OF FINANCE AND MANAGEMENT SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, addressed the fiscal note. There is nothing mandating holding harmless of the grantees. Representative Hawker agreed. Ms. Clarke provided the history of the program. The original program was established in the 1980's and the block grants went to only Anchorage and Fairbanks. In the early 1990's, with the downturn in state revenues, then- Representative Boyer put the program in statute and it was developed. At that point, no other community qualified except Anchorage and Fairbanks. Ms. Clarke referred to the fiscal note related to the CRA version of the legislation (#2), which would impact in FY 07. She noted the two scenarios provided by the note. Ms. Clarke referenced page 3. The department made the program a statewide program, which would cover the entire population of the State. Page 4 of the fiscal note provides the opposite view, which would need an additional appropriation. 3:35:57 PM Representative Hawker asked about the grant history. He pointed out that the program had been targeted. It was codified in 1992. He noted that two years ago, the grants had been zeroed out. He asked how that reconciled with expansion of the program. 3:37:34 PM Ms. Clarke related that governors and commissioners can change their minds and they do support the bill at this point. Representative Hawker inquired about diminishing the amount going to the communities. Ms. Clarke replied that the department is neutral on that subject. The original intent of the social services block grant has changed with the advent of Mat-Su. When the programs were at their budget height, there were many designated grants. Today, there are no designated grants. Representative Hawker asked for clarification of "none" going to the state. Ms. Clarke replied that there are none in the operating budget. Representative Hawker noted that $1.5 billion dollars is in the Department of Health and Social Services budget this year. He requested a statewide breakdown. Ms. Clarke replied that there is a breakout of the community grants in the amount of $150 million dollars in the grant book analysis. Representative Hawker asked if scenario 1 or 2 is the intent of the bill. Representative Wilson replied the intent is not to make anything worse for other areas at the benefit of her district. Representative Hawker observed that is scenario 2. He asked, with limited financial resources, where the dollars would come from. Representative Wilson commented that services have been cut to parts of the state and to municipalities due to the elimination of revenue sharing. This type of economy puts more stress on families and communities, and human services needs definitely need to be met throughout the state. 3:42:18 PM Representative Hawker asked which area to the money should be taken from. Representative Wilson replied from the personal care attendant area, which needs sideboards. Representative Hawker agreed. So much is driven by abandoned revenue sharing. He stated appreciation for Representative Wilson's perspective. Vice-Chair Stoltze recalled that many cuts have been made to communities statewide. Representative Wilson responded that in Southeast Alaska, services such as Catholic Community Services had to be cut, which left a large void. Representative Hawker made a suggestion about the fiscal note; have a two-scenario fiscal note with a clear intent. Ms. Clarke said that could be done. Representative Hawker noted this year's 5 percent increase for PERS and TRS. Ms. Clarke deferred to the wishes of the finance committee. 3:46:54 PM Representative Weyhrauch MOVED to ADOPT Amendment 1, on page 1, line 8, to delete 35,000 and insert 50,000. Vice-Chair Stoltze OBJECTED for discussion purposes. Representative Wilson stated her support for the original bill. Vice-Chair Stoltze WITHDREW his objection to adopt Amendment 1. There being NO OBJECTION, it was so ordered. 3:48:20 PM Ms. Clarke clarified that several regions of the state would not qualify at 50,000 population. It would cost $400,000 to hold the current participants harmless. Representative Wilson explained how the consortium would work. 3:49:54 PM Vice-Chair Stoltze set the bill aside. HB 231 was HELD in Committee for further consideration. 3:50:29 PM