HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE January 21, 1998 8:05 a.m. MEMBERS PRESENT Representative Ivan Ivan, Chairman Representative Fred Dyson Representative Jerry Sanders Representative Al Kookesh Representative Reggie Joule MEMBERS ABSENT Representative Scott Ogan Representative Joe Ryan COMMITTEE CALENDAR EXECUTIVE ORDER NO. 100 Moving the "Silver Hand" Program from DCED to DOE - HEARD AND HELD (* First public hearing) PREVIOUS ACTION No previous action to record WITNESS REGISTER TOM LAWSON, Juneau Section Chief Division of Trade and Development Department of Commerce and Economic Development P.O. Box 110804 Juneau, Alaska 99811-0904 Telephone: (907) 465-2017 POSITION STATEMENT: Explained Executive Order 100. VERNON CHIMEGALREA, Director Native Arts Program Alaska State Council on the Arts Department of Education 411 West Fourth Avenue, Suite 1E Anchorage, Alaska 99501 Telephone: (907) 269-6610 POSITION STATEMENT: Testified in support of Executive Order 100. HELEN HOWARTH, Executive Director Alaska State Council on the Arts Department of Education 411 West Fourth Avenue, Suite 1E Anchorage, Alaska 99501 POSITION STATEMENT: Testified on Executive Order 100. ACTION NARRATIVE TAPE 98-1, SIDE A Number 0001 CHAIRMAN IVAN IVAN called the House Community and Regional Affairs Standing Committee meeting to order at 8:05 a.m. Members present at the call to order were Representatives Ivan, Dyson, Sanders and Kookesh. Representative Joule arrived at 8:07 a.m. EO 100 - MOVING THE "SILVER HAND" PROGRAM FROM DCED TO DOE Number 0053 CHAIRMAN IVAN announced the committee would hear Executive Order 100 which moves the "Silver Hand" Program from the Department of Commerce and Economic Development to the Department of Education. He said according to AS 24.08.210, the legislature has 60 days, until March 12, 1998, to disapprove the order if it so chooses. He indicated that the committee would hear a briefing from the departments. Number 0132 TOM LAWSON, Juneau Section Chief, Division of Trade and Development, Department of Commerce and Economic Development, came before the committee. He stated he would give a brief overview of the program, talk about the history of the program within the Department of Commerce and Economic Development and also speak about why the department believes the program should be moved to the Alaska State Council on the Arts (ASCA) within the Department of Education. Mr. Lawson noted the director of the council, Helen Howarth, was listening via teleconference. Number 0172 MR. LAWSON informed the committee members that the Silver Hand Program certifies handicrafts as being made by a Native Alaskan, Eskimo, Aleut or Indian. He noted the emblem is a silver hand with a black oval background. Mr. Lawson explained that a product that shows up in a store with the emblem on it is supposed to be guaranteed that it is made by a Native. MR. LAWSON referred to the operation of the program and said there are four basic areas that has to be covered when the program is being run. The first area is the processing of the permits, which ensures that the applicant is indeed eligible to be part of the program. The second area is the education of those Native handicrafters that are not yet in the program or who do not know of the program. He said they want to get those people to be a part of the program. Mr. Lawson explained the third area is the promotion of the program so that when tourists, or any other buyer of Native handicrafts, goes into stores that sell handicrafts that they specifically ask for handicrafts with the emblem on them. Mr. Lawson explained the fourth and last part of the operation of the program is basically the enforcement aspects. He said there are people that try to counterfeit Native handicrafts. They try to represent handicrafts as being authentic Native handicrafts. Number 0325 MR. LAWSON informed the committee members that the program was set up in statute in 1961. It has been changed a few times since then, the most recent being in 1993. At that point, regulations were set up to clarify and strengthen the eligibility rules and to make it easier to have enforcement for anyone who violated the program. Mr. Lawson stated that in fiscal year `97, the department's budget for the program was $5,000. He said over the years, the Silver Hand Program has had its "ups and downs" in the Department of Commerce and Economic Development. Over the past several years, they have had to really scrape money together to pay for the printing of the stickers and tags that are issued, and to do whatever they can in terms of promoting the program. Mr. Lawson said a very small portion of one staff person's time was assigned to the program. He said they weren't able to commit the resources to the program that it needed. Number 0446 MR. LAWSON said a year ago, there were about 600 Native "handicrafters" that were part of the program. There is also a part of the program where you can be a "Silver Hand" agent which would make you eligible to issue individual permits. There were 27 agents. He noted those figures are about a year old. Number 0479 MR. LAWSON referred to the terms of how the department decided to move the program to the ASCA and explained in 1995, the Governor started the Marketing Alaska Program which was basically a public/private sector effort. The Governor named a seven sector working group made up of public and private sector leaders. One of the working groups that the Governor named was the cultural resource sector working group which was made up of about 12 to 15 people who were leaders in the arts and crafts industry in Alaska and were cultural experts. Their recommendation, after studying several issues within their charge, was that the Silver Hand Program was much better suited to be in the ASCA than in the Department of Commerce and Economic Development. Their thought was that it would probably thrive more with the council than it did in the department. MR. LAWSON referred the committee members to information titled, "Marketing Alaska, The Governor's Economic Development Initiative, 1996 Summary." He said recommendation 15 basically says that the Silver Hand Program should be moved to the ASCA. Mr. Lawson said he would be happy to answer any questions the committee may have. Number 590 CHAIRMAN IVAN said the bottom line in reviewing the transfer is to try and protect the program and let it be where it will have the most support. He said he wants the program to stay in a recognized state department and it should continue, as it does have some economic impacts on some of the artists from communities throughout the state. Chairman Ivan noted he isn't against the order, but he wants make sure the Silver Hand Program continues to be a viable program. He said there has been a misunderstanding that the legislature was attacking the program and that is far from the truth. They just want to make sure the program is being handled correctly. Number 0756 REPRESENTATIVE FRED DYSON asked if it is Chairman Ivan's intention to act on the order. CHAIRMAN IVAN stated his intention is to basically get a briefing, learn what the program is and learn why the transfer is being suggested. Number 0799 REPRESENTATIVE DYSON asked Chairman Ivan if the committee does nothing, the transfer will happen. CHAIRMAN IVAN responded that is correct. If the committee opposes the action, the committee would have to introduce a concurrent resolution and pass it. It would have to go through the legislative process like legislation does. Number 0838 REPRESENTATIVE DYSON asked if the artists have been notified that this may happen. He inquired if the artists have any problems with the transfer, would the committee hear about them. CHAIRMAN IVAN said there are two parts. He said he doesn't know if the Department of Commerce and Economic Development has notified the artists. He referred to the legislative hearing being noticed, but said he thinks there should be more committee time to address Representative Dyson's concern. REPRESENTATIVE DYSON said his recommendation would be that the committee make an effort to get the word out through the media, journals, et cetera, to let the artists know this is pending and they should notify the committee if they have concerns. Number 0958 REPRESENTATIVE ALBERT KOOKESH said he doesn't mean to be unfair to anybody, but he believes time can be wasted by letting the order drag on. He stated it makes sense for the program move to the ASCA. Representative Kookesh said he thinks Native artists could care less which department the program is in as long as the program is in place. He asked why the committee should have hearing after hearing on something that is so simple. Representative Kookesh indicated if there are 600 artists in the program, he probably knows at least one-third of them. Nobody has contacted him with concerns about moving the program. Number 1011 REPRESENTATIVE REGGIE JOULE said Mr. Lawson mentioned there is one staff person who puts part of their time into the program and asked at what level. MR. LAWSON responded that the department has done a contract with the council for this year to actually informally have them operate the program. The order is the final step to segregate the statute from the Department of Commerce and Economic Development to the council's statute. He said the council is currently operating the program. Mr. Lawson said he is pretty sure that every one of the Silver Hands Program people, who are certified, were notified of the change several months ago. He said when the department operated the program, it was a range 20 and they probably allocated less than 5 percent of their time towards the program. Mr. Lawson also noted there was also some clerical assistance. The department believed that not enough was being done to really push the program. Number 1112 REPRESENTATIVE JOULE referred to the Governor's Economic Development Initiative for Marketing Alaska and said there are three different areas. There are priorities, action items and those things where they believed further dialogue was needed which is in the recommendations 1 through 17. He said while recommendation 15 did call for revamping of the Silver Hand Program, that still fell under recommendation 3. He said, "Any further dialogue was needed because I guess there just wasn't consensus among the people that were involved." He read recommendation 17, "Move the Alaska State Council on the Arts and the Silver Hand program to a cultural resources entity in the Department of Commerce and Economic Development...." He asked if that was just something to look at because people couldn't make up their minds of what to do. Representative Joule said one of the suggestions is to move the program to the council, but another suggestion is to move the council back to the Department of Commerce and Economic Development. Number 1195 MR. LAWSON said, "There was a lot of discussion about that and I think that the arts council has had its ups and downs with where it is and I think at the time that was drafted it was still - the arts council - I think the people who studied - studied the cultural resources, issues and opportunities at that point felt that the arts council might actually thrive in commerce. Now since that recommendation was made, I think that the feeling is more that it's fine where it is and so that's why at this point in time there isn't any effort to transfer the arts council." Number 1245 REPRESENTATIVE JERRY SANDERS asked Mr. Lawson if he believes the Silver Hand Program will receive more money or more dedicated facilities if it is in the Department of Education than it does where it currently is. MR. LAWSON stated it is the department's feeling that the answer is "yes." The reason is that they feel the arts council focuses on arts. They have staff who are currently operating in the program and are experts on Native handicrafts which the Department of Commerce and Economic Development never had. Mr. Lawson said he believes the State Council on the Arts is more geared and poised toward looking for other sources of funding, such as federal grants, to operate their various programs in the world of art. He said that is what the program needs. Mr. Lawson said his department didn't have staff to pro-actively chase other sources of funding. Number 1343 REPRESENTATIVE SANDERS said he sees the program as a commercial enterprise. He said he doesn't see how it fits as well under the council. He said when you talk about more money and facilities being dedicated to it, it is his impression that the arts, nationally and statewide, are in an ebbing situation. The support hasn't been there over the last four to six years and he doesn't see that changing. Representative Sanders said he believes it is connected to commerce. It is an art, but the object of the art is the commerce. He said, "They're not doing this to grow their culture, they're doing it to make some money." Number 1262 MR. LAWSON said he is hopeful that staff for the ASCA can convince him otherwise. He stated he can only speak about where the program was over the last several years. He noted in the late 1980s, the program was inactive for awhile. The biggest criticism is the lack of enforcement. There has been a growing problem with what is called "knock-off art" where artisans from other countries are imported into the state or the Lower 48 and they basically imitate Native art. He said he hopes the ASCA can put more resources towards the program than the department was able to do. Number 1476 REPRESENTATIVE SANDERS stated he is in favor of the Silver Hand Program. He said he just has to be convinced that the program would be better off in the Department of Education. Number 1487 REPRESENTATIVE KOOKESH said, "I just wanted to make a comment about the question of commerce versus the question of art. I would probably be concerned, as my colleague here, if the state was giving those artists resources from the state. Then I would probably say 'yeah, maybe it should stay in the Department of Commerce.' But all this is is a Silver Hand Program which is used for identifying Native art. The state does not give any resources to these artists. The only thing the state does is just spend a little money to have the silver hand printed. The question then is a question of art. It just seems to me to make more sense to have something -- this kind of a program in an area that people are interested and involved and want to see the program work. And it doesn't matter to me whether it's under the Department of Education, just that it's with the council of arts in the state of Alaska. That makes a lot more sense to me. Like I say, if they were getting money from the state, hey, I think it should stay in Department of Commerce myself, but they're not. This is not a finance program, it's an art program." Number 1547 REPRESENTATIVE DYSON said he appreciates knowing the participants in the Silver Hand Program have been notified of the change. He indicated the bill just confirms what has been the practice. Representative Dyson said he believes Representative Kookesh has made it clear that all the council is doing is certifying the authenticity of handicrafts and they aren't doing much promotion. He said, "If the people who are doing it like it to be transferred and the artisans have been notified and have not raised any objections, it doesn't seem to me that we should either. But I am comforted by the Chair telling us that if indeed a whole bunch of objections show up, we have some time to rectify the situation so let's move." Number 1625 VERNON CHIMEGALREA, Director, Native Arts Program, Alaska State Council on the Arts, Department of Education, testified via teleconference from Anchorage. He read the following statement into the record: "Thank you for this opportunity to address you about the Silver Hand Program. "The Alaska State Council on the Arts is in support of the Governor's Marketing Alaska recommendation to transfer the Silver Hand Program from the state Alaska Department of Commerce and Economic Development to the Alaska State Council on the Arts. "The economic impact of the arts have been on a state -- have been proven on a state and national level. In Alaska, the arts are a viable industry with an annual income or an annual economic impact over $23.5 million. The importance of the arts industry is especially evident in rural Alaska where it may be a family's primary source of income. "ASCA has long recognized that communities and artisans need assistance in developing and marketing local and regional cultural opportunities. It provides grant funds, technical assistance and leadership to help develop the arts industry in Alaska. For example, ASCA is in its third year of a partnership with Department of Community and Regional Affairs to support community-based efforts to diversify and strengthen rural economies through arts- related economic development projects. The ASCA Rural Arts Initiative Grant Program has funded three arts cooperatives being developed through the Association of Village Council Presidents in the Yukon-Kuskokwim Delta, the Tribal Council of St. Paul Island and in the future the Tribal Council of Pt. Hope. "ASCA is co-sponsoring a technical assistance workshop in February for the planning and management of Alaska Native Museums and Culture Centers. The workshop will include sessions on the role of tourism, role of gift shops, collections management and exhibit planning. "Last fiscal year ASCA made over $500,000 in grants to organizations and individuals. Every grant we issued supports Alaskan jobs and creates economic impact in the community it was awarded. "The Master Artist and Apprenticeship Program pairs apprentices. This is one of our other programs and it provides for serious study of a Native art with acknowledged master artists. This program encourages the creation of high quality products by master artists in traditional Native art forms. "The Silver Hand Program was established to authenticate Native arts for the retailers and consumers while protecting the work of Native artists. The program began with good intentions. It has languished due to lack of commitment and resources at the Department of Commerce and Economic Development. The Governor's Marketing Alaska task force identified significant problems with the program calling it 'outdated, vague and ineffective.' The Silver Hand Program has been repeatedly criticized for failing to carry out its obligations. "It is estimated that over 85 percent of art merchandise sold as Native made is not authentic. In addition, Native artists lack trust in the program and retailers are not educated on how to market Native arts and crafts without misrepresenting the art and its cultural origin. "In response to the Governor's Marketing Alaska findings, it was recommended that the Alaska State Council on the Arts take over management of the Silver Hand Program. This program goes hand in hand with our existing Native Arts Program. As the Native Arts Program director, I apply my art and language expertise as well as a statewide networking to enhance and build the program. Since the beginning of the fiscal year, ASCA has devoted considerable staff resources to revitalize this important program. To begin, we convened the advisory committee of both Native artists and retailers. We incorporated the Silver Hand Program into a statewide Native arts outreach through exhibitions at major conferences, for example, the AFN [Alaska Federation of Natives] Convention, the (Indisc.) Conference, and such. And as well as our travel -- we incorporate as well as our travel to hub areas for other travel purposes. We've produced video public service announcements describing the program and the purpose of the Silver Hand Program. We've increased enrollment in the program by 50 percent to over 600 artists. We contacted the Federal Trade Commission to discuss enforcement issues and are working to make the Silver Hand Program locally accessible by developing partnerships with the village corporations. We've placed advertisements in major tourist publications alerting travelers to the importance of the Silver Hand tag when purchasing authentic Native arts. And we've also publicized the announcement in our 'communica' which comes out on a (indisc.) monthly basis. "The council feels strongly that the Silver Hand Program will be best served under the direction of the Alaska State Council on the Arts. We will seek the public and private resources necessary to enhance the economies of rural Alaska through arts-related program like the Silver Hand Program." MR. CHIMEGALREA informed the committee members that the council has received applications from a group of Chevak High School students in regards to the Silver Hand Program. He thanked the committee for listening to him and offered to answer questions. Number 1894 REPRESENTATIVE JOULE said it sounds like not only does Mr. Chimegalrea have a commitment for putting time and financial resources into this effort, but they have already been doing that. MR. CHIMEGALREA explained that what they have done is they have taken a percentage of his existing pay and staff time and incorporated the Silver Hand Program into existing programs. REPRESENTATIVE JOULE said, "Within the Department of Commerce and Economic Development, you know, understanding that this Silver Hand is to certify authentic Native art. Was there a Native person working with the program?" Number 1935 MR. LAWSON responded in the negative. REPRESENTATIVE JOULE asked if the program was to move to the council, would there be a Native person working with the program. MR. CHIMEGALREA answered in the affirmative and added the Native Arts Program director would be working with the program. Number 1962 HELEN HOWARTH, Executive Director, Alaska State Council on the Arts, Department of Education, testified via teleconference from Anchorage. She informed the committee that the council has a dedicated staff person position devoted to Native arts and it is one of the only staff positions within the agency. She stated that Native arts and Native arts development is a very important part of their mission and an important part of what the council does. Number 1986 CHAIRMAN IVAN thanked Mr. Chimegalrea and Ms. Howarth for their participation. He announced he would hold the executive order. He said it would be addressed in the future. He asked the committee members if they hear from artists from their districts who have recommendations to improve the program to inform him about them. Number 2036 REPRESENTATIVE JOULE said the order would be held for the purpose of trying to reach some of the artists around the state. He asked if there will be an opportunity for action. CHAIRMAN IVAN said the committee does have an opportunity for action. If action isn't taken on the executive order, it would go forward. If there is opposition, then action needs to come out in the form of a resolution. He thanked everyone for their participation. ADJOURNMENT Number 2083 CHAIRMAN IVAN adjourned the House Community and Regional Affairs Standing Committee meeting at 8:37 a.m.