HB 190-CHILDREN'S TRUST GRANT FOR ENDOWMENT 3:26:30 PM CO-CHAIR KELLER announced that the next order of business would be HOUSE BILL NO. 190, "An Act privatizing the Alaska children's trust as a separate endowment fund; providing for an administrator for the assets of the former trust; establishing conditions for a grant of the balance of the former Alaska children's trust; designating certain receipts as available for grants to the trust's successor; and providing for an effective date." 3:26:55 PM CO-CHAIR HERRON moved to adopt the proposed Committee Substitute (CS) for HB 190, Version 26-LS0502\C, Mischel, 4/10/09, as the working document. 3:27:03 PM CO-CHAIR KELLER objected for the purpose of discussion. 3:27:09 PM REPRESENTATIVE ANNA FAIRCLOUGH, Alaska State Legislature, as prime sponsor of HB 190, explained the changes incorporated in Version C: Section 1 stipulates that the annual appropriation would be equivalent to 5 percent of the market value ["of the unencumbered balance of the trust income and principle"]; Section 2 adds the areas of sexual assault and domestic violence as those in which the public members [appointed to the Alaska Children's Trust Board] could have experience and expertise; Section 3 describes the powers and duties of the ACT Board, including that it monitors grants, raises funds for the trust, and approves written findings to the named recipient, which essentially mirrors the duties already existent in state code; Section 4 amends AS 37.14.240 to allow the average of the 5 percent of market value to be appropriated to the main participant, as well as allowing $150,000 from the principle of the trust to be used for administrative expenses, which, except for the percent of market value, is consistent with current statute; and Section 5 allows the legislature to appropriate the funds to a recipient that is a nonprofit dedicated to the reduction and prevention of child abuse and neglect, and requires the main recipient to comply with grant requirements imposed through HB 190. 3:29:56 PM REPRESENTATIVE SEATON indicated that Version C would address many of the concerns of the committee. He asked what time of year the aforementioned balance would be judged as unencumbered. 3:30:22 PM REPRESENTATIVE FAIRCLOUGH noted that there are two amendments for the consideration of the committee. One of the amendments would change the market value to the average and specify a date, while the other would add one nonvoting member [to the board]. 3:31:03 PM CO-CHAIR KELLER removed his objection. There being no further objection, Version C was before the committee as the working document. 3:31:15 PM REPRESENTATIVE FAIRCLOUGH said her office reached out to the administration over the last 30 days, asking for help in how to address the issue of child abuse and neglect in Alaska, and a week ago met with the administration in the Office of the Governor; however, she said there was no response until five minutes before this House Health and Social Services Standing Committee meeting, when the administration stated that it would like to "hold off and wait a little bit more." She said the administration has provided no specific recommendations on how to "do anything differently." She emphasized the importance of moving the bill through the first committee, at least, to continue its discussion. She said she cannot move forward on this issue when being told by the administration that it wants to wait. REPRESENTATIVE FAIRCLOUGH noted that in 2009, there will be $186,799 distributed to community members, whereas the distribution in 2008 was $557,473. The bill would stabilize the funding stream into the prevention of child abuse and neglect. The occurrence of that abuse and neglect rises in homes during a downturn in the economy, she noted. 3:34:03 PM PANU LUCIER, Executive Director, Alaska Children's Trust (ACT) and Friends of the Alaska Children's Trust (FACT), testified in support of CSHB 190, Version 26-LS0502\C, Mischel, 4/10/09. Version C would allow FACT, as a nonprofit organization established in 1997, to continue to raise funds and set up an endowment fund outside of the state. The organization then could guarantee that "donor intent is honored." Version C would also allow for a more streamlined process for distributing grant funds, Ms. Lucier related. She opined that Representative Fairclough's comment regarding the lack of funding this year illustrates the need to set up an endowment to enable the FACT Board to be successful in raising funds to support the mission of addressing child abuse and neglect. Ms. Lucier concluded by stating that both ACT and FACT support amending the bill to include a five-year average percent of market value. 3:35:59 PM SAMMYE POKRYFKI, Vice Chair, Friends of the Alaska Children's Trust (FACT), testified in support of CSHB 190, Version 26- LS0502\C, Mischel, 4/10/09. 3:36:29 PM REPRESENTATIVE SEATON moved to adopt Amendment C.1, labeled 26- LS0502\C.1, Mischel, 4/14/09, which read: Page 2, line 8: Delete "." Insert "; and" Page 2, following line 8: Insert new paragraphs to read: "(5) one nonvoting member appointed by the  speaker of the house of representatives;  (6) one nonvoting member appointed by the  president of the senate." 3:37:00 PM CO-CHAIR KELLER objected. 3:37:06 PM REPRESENTATIVE FAIRCLOUGH explained Amendment C.1. [Co-Chair Keller's objection was treated as withdrawn.] 3:37:32 PM REPRESENTATIVE SEATON objected for the purpose of discussion. 3:37:45 PM CO-CHAIR KELLER expressed his support of Amendment C.1. He said he gets uneasy when the legislature appropriates money and does not pay attention to how it is being spent. The proposed two nonvoting members would provide a link to the legislature. 3:38:35 PM REPRESENTATIVE SEATON said he appreciates that the members that would be added by Amendment C.1 would be nonvoting members, so that there would be no problems regarding a quorum. He removed his objection. There being no further objection, Amendment C.1 was adopted. 3:38:56 PM CO-CHAIR HERRON moved to adopt Amendment C.2, labeled 26- LS0502|C.2, Mischel, 4/14/09, which read: Page 1, line 5: Delete "market value of the unencumbered balance" Insert "average of the market values" Page 1, line 6, following "principal": Insert "on June 30 for the first five of the six fiscal years immediately preceding that fiscal year" 3:39:07 PM CO-CHAIR KELLER objected. 3:39:15 PM REPRESENTATIVE FAIRCLOUGH explained that Amendment C.2 addresses concerns raised by proposing to let the Department of Revenue do what it does best - average the market values - and by setting the date of June 30. 3:39:43 PM CO-CHAIR KELLER removed his objection. There being no further objection, Amendment C.2 was adopted. 3:39:56 PM REPRESENTATIVE CISSNA related that she has watched ACT over time, and "the community" relies on grants to improve the conditions of children. She said she wants to move forward with the bill. 3:41:07 PM REPRESENTATIVE HOLMES spoke in support of HB 190, noting that she is a co-sponsor of the proposed legislation. She emphasized the hard work of ACT and FACT over the last several years toward this legislation, along with the efforts of the prime sponsor. The proposed bill will help obtain two main goals: to "steady out the stream of money that's available" and to have an entity who can receive private donations to supplement the funds coming from the state. She said the bill is not the ideal solution, but is "an excellent compromise." 3:42:49 PM REPRESENTATIVE SEATON noted that language on page 1 of Version C states that the legislature may appropriate to a named recipient, while on page 2, the language specifies that the board shall appropriate to a named recipient. He asked if it would be a variable named recipient, and whether that is the same grant being referenced on pages 1 and 2. 3:43:38 PM REPRESENTATIVE FAIRCLOUGH responded that the ACT Board issues grants to the named recipient, and then after that will review what that named recipient does regarding "subgrantees." In response to a request for clarification from Representative Seaton, she stated that the board, under state statute, is the entity that makes the award to the recipient; however, the Alaska State Legislature is the appropriation power. Once the legislature chooses to appropriate the funds, the board goes through the grant writing process to name that recipient. 3:46:03 PM CO-CHAIR HERRON moved to report CSHB 190, Version 26-LS0502\C, Mischel, 4/10/09, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 190 (HSS) was reported from the House Health and Social Services Standing Committee. The committee took an at-ease from 3:46 p.m. to 3:51 p.m.