HOUSE BILL NO. 137 "An Act redesignating the Alaska State Council on the Arts as a public corporation and governmental instrumentality of the state; defining the powers and duties of the Alaska State Council on the Arts; providing exemptions from certain statutes for the Alaska State Council on the Arts; making conforming amendments; and providing for an effective date." 3:27:59 PM KRISTIN KRANENDONK, STAFF, REPRESENTATIVE HARRIET DRUMMOND, read from prepared remarks. House Bill 137 quasi-privatizes the Alaska State Council on the Arts (ASCA) by restructuring it as a public corporation in order to help the ASCA to continue its work with self-employed Alaskan artists and art businesses during these challenging fiscal times. This new status will allow the ASCA to increase its ability to leverage funds from non-governmental contributors and better adapt to the shifting economic future.   This bill adds Alaska State Council on the Arts employees to exempt employee status. Currently the ASCA has 4 full time employees, and Rep Drummond's office reached out to those employees and they were all supportive of this change. This section makes those employees exempt from the State Personnel Act. The bill adds artists' submission made in response to an inquiry initiated by the ASCA to the list of records that are exempt from public inspection. This does not include artists awarded a commission however. The bill adds appropriate board member language needed to create "trustees" since the corporation will be governed by a board of trustees. And it replaces language that entitles trustees to be reimbursed for travel expenses at the same rate as members of other state boards. HB137 also adds "literary arts" as a field represented within the board and replaces "educational" objectives with "strategic" objections as it relates to the councils ability to enter into contracts. Other changes include exemption from the State Procurement Code, while still providing for formal, appropriate procurement protocols for ASCA. Restructuring will keep ASCA's operating budget under the Executive Budget Act for openness and transparency. Transition language will allow ASCA's advisory committees, and the public process will remain in place as ASCA administers grants, programs, and services. Finally there is transition language in the bill that will also allow Council members to remain on the board until their term is over and allow current employees to remain on staff. The effective date for this legislation is July 1, 2017. The State Council on the Arts wants to ensure that it is in a position to expand its important work to serve all Alaskans. Private funders across the nation are increasingly approaching ASCA to offer support. Carefully considered restructuring efforts have the potential to allow the Council to advance the opportunity to grow the development base, as well as reduce its reliance on State funds. HB137 will improve the ability of the Council to leverage non-state funding and represents a real opportunity to realign ASCA to better perform in the environment which exists in Alaska today. 3:32:13 PM BEN BROWN, CHAIR, ALASKA STATE COUNCIL ON THE ARTS, agreed with Ms. Kranendonk's remarks. He elaborated that the bill represented over a year's efforts by all of the members of the council and staff, and partners at Rasmussen Foundation and other foundation partners. He believed the legislation was carefully crafted. Co-Chair Foster OPENED public testimony. ALICE BIOFF, KAWERAK, INC., NOME (via teleconference), spoke in support of the legislation. She read from a prepared statement: Dear Honorable Committee Chair and Committee members, My name is Alice Bioff, resident of Nome, Alaska, currently employed at Kawerak, Inc. and an Alaska State Council on the Arts (ASCA) council member. Thank you all for the opportunity to testify in support of HB137. I am testifying today in my capacity as an ASCA council member. I am a tribal member of the Native Village of Koyuk, and grew up there and in Nome. My family and I have lived in Nome for the last 17 years. For much of that time, I have been employed by Kawerak, Inc., the regional Native non-profit consortium of tribes for the Bering Strait region, as a Business Planning Specialist. Through our work here at Kawerak, I am honored and privileged to work with artist entrepreneurs within our communities. We provide direct technical assistance offering tools and resources to assist artists continue their work so that they can sustain themselves, their families and their communities. It is through this work that I have seen firsthand how important it is for these artists who live in communities with very few resources and infrastructure, to grow their businesses through opportunities such as those that become available through ASCA and others. Artist Entrepreneurs are economic development drivers in their communities and the Alaska State Council on the Arts supports these communities through their work and advocacy. With their partnerships, resources and programs, we see a bright future and growth opportunity to support all artists across the State. Through the restructuring initiative, we see ASCA services continued and strengthened to support the artists through improved ability to react to funding opportunities and better represent, support and advance the artists by offering the tools and services needed to strengthen an already existing and important economy. This is critical to strengthening and sustaining our rural communities in this fiscally challenging time. HB137 streamlines the process ASCA will use to present opportunities to artists all over Alaska, including those artists we have worked with for years here in the Bering Strait region. From my perspective, this will be a great benefit for all artists including those in rural Alaska. 3:36:09 PM ANDREA NOBLE-PELANT, EXECUTIVE DIRECTOR, ALASKA STATE COUNCIL ON THE ARTS, EAGLE RIVER (via teleconference), testified in support of the legislation. She shared that she was a council member for 11 years. She offered that the council's purpose was to support and advance Alaska's creative industries and its cultural infrastructure. She believed a thriving arts community created a ripple effect around the state and connected the population. The council was in existence for 51 years and was ready for organizational change. She noted that Alaska's creative industries was growing due to targeted public and private investment in the state's cultural infrastructure over the past 10 years, experiencing rapid growth in grants programs, and public private partnerships. The council worked on national and international levels on projects, initiatives, and policies through arts organizations. In addition, the council provided professional development throughout the state. She commented that the bill enabled the council's staff to manage projects in a timely manner and increased its work across sectors such as transportation, healthcare, economic development, and tourism. She mentioned that the council's mission evolved to "expand access to arts experiences;" art as a process versus art as a product. The council's programs reached military service members for treatment of PTSD (Post Traumatic Stress Disorder) and incarcerated individuals learning how to create art for post-release success. The council assisted teachers who wanted to live and teach in rural communities and provided children and youth opportunities to learn through arts and culture. She related that HB 137 allowed the council to be responsive in implementing projects that affected its performance and the ability to seek and secure private funding. She emphasized that the council worked with partners and all of the revenues from the funders was funneled back into Alaskan communities in the form of grants, programs, and resources. 3:40:08 PM Ms. Noble-Pelant provided the list of partners including the Rasmussen Foundation, the Alaska Arts and Culture Foundation, Atwood Foundation, National Endowment for the Arts, Margaret A Cargill Philanthropy, the SERI Foundation, SeaAlaska Heritage Institute, Alaska Humanities Forum, Western States Arts Federation, and the American for the Arts. Co-Chair Foster CLOSED public testimony. Representative Wilson asked about required matching funds. She asked for evidence on whether matching funds had to be GF. Mr. Brown answered in the affirmative and emphasized that the provision was laid out in federal code. He termed it as "black letter law." He relayed that the state of Kanas eliminated their state match and ultimately lost their entire federal grant. He reported that the council discussed ways to increase its earned income that qualified as a state match. He exemplified a license plate bill from the previous session that included a provision for the arts license plates. The council currently had a design contest for Alaskans to design license plates and then sell them, although he did not anticipate a large revenue stream from the venture. However, it was an example of program receipts that can offset the state matching funds. He maintained that private match money will not work. Representative Wilson had asked the question because she thought that some additional federal dollars were available that the state was not receiving. Mr. Brown replied that the partnership agreement was for a three-year period and the amount was determined by the National Endowment for the Arts. In addition, the council sought merit-based competitive funds. He specified that programs like Poetry Out Loud and Creative Forces did not require matching funds. He assured the committee that the council had done very well in attaining funding of all types and that the council "would never leave a federal dollar on the table." 3:44:47 PM Representative Pruitt asked whether the council was able to utilize private funds to receive more federal funds. Mr. Brown responded that over half of the council's budget was derived from private foundation money and the rest was state appropriation and NEA match. Any private money was used over and above the funding to support its mission. Representative Kawasaki asked whether the council was at the maximum federal match. Mr. Brown answered that the council was at "the right amount." He elucidated that some states appropriated more than necessary. Representative Kawasaki asked for verification that the bill would not jeopardize any of the National Endowment for the Arts match. Mr. Brown replied that the funds were not in jeopardy and assured the committee that he confirmed the matter with the NEA. Representative Kawasaki asked whether it was typical or necessary for states to have a council or committee to receive NEA funding. Mr. Brown answered in the affirmative. He elaborated that the state had to have some sort of council containing public members and within the larger mandate, states did it differently. Alaska would be the first state with a quasi-private corporation. He reported that other states were watching Alaska with interest in adopting the idea. He thought that the bill could set a positive example for the rest of country. HB 137 was HEARD and HELD in committee for further consideration. Co-Chair Seaton addressed the schedule for the following day.