Legislature(2019 - 2020)ADAMS 519
02/26/2020 09:00 AM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB205 || HB206 | |
| Amendments | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 205 | TELECONFERENCED | |
| += | HB 206 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 205
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; making
appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska, from the constitutional budget
reserve fund; and providing for an effective date."
HOUSE BILL NO. 206
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
9:14:34 AM
^AMENDMENTS
9:15:00 AM
AT EASE
9:15:13 AM
RECONVENED
Representative Merrick MOVED to ADOPT Amendment H DEC 1
(copy on file):
Spill Prevention and Response
H DEC 1 - Reduce Staffing Levels and Eliminate Class
II Facilities Unit to Avoid Revenue Shortfall
Offered by Representative Merrick
1002 Fed Rcpts (Fed) -375.6
1052 Oil/Haz Fd (DGF) -643.5
Co-Chair Johnston OBJECTED for discussion.
Representative Merrick explained that the amendment would
reduce funding a portion of the Spill Prevention and
Response (SPAR) program. The reduction would align
expenditures with anticipated revenues to avoid a funding
shortfall. She offered that with a decline in oil revenue,
the expenses had been maintained but revenues had gone
down. The program was looking at a shortfall in FY 24. The
amendment would help close the gap. However, there would
still be a shortfall in funding of $70,000 in FY 24. If the
amendment did not pass, the anticipated shortfall would be
about $700,000. The governor had offered the amendment
during subcommittee, but it was not given proper
consideration because it was not a long-term fix. There
were members in the other body that were working on a more
permanent fix. The amendment would provide the department
some time until the long-term fix could be applied. She
spoke with the commissioner who indicated the amendment
would lead to a reduction of 7 positions. She elaborated
that 4 of the positions were unfilled while 2 positions
were vacant because the employees had taken other jobs
within the department. One person had been offered another
position but had not accepted it yet.
Representative Josephson opposed the amendment. He detailed
that the state would lose approximately $400,000 in federal
receipts if the amendment was adopted. The amendment
imposed a burden on undesignated general funds (UGF). The
amendment would eliminate the state oversight of storage
facilities that housed between 1,000 and 420,000 gallons.
He continued that relatively to the funding shortfall, his
report showed that the fund would run out of money in
FY 25. He had been told of one approach under consideration
in the Senate which contained a possible fix. The total
shortfall, which would eliminate the funding source, would
not occur for 4 to 5 calendar years. He was concerned the
amendment was a penny-wise, pound-foolish approach. He
would be opposing the amendment. He thought necessary
oversight of the class II facilities, the tank farms, was a
good reason to reject the amendment.
9:19:01 AM
Representative Merrick provided wrap up on the amendment.
She commented that although she appreciated comments made
by Representative Josephson, she did not agree with his
math. She had been assured by the commissioner that the job
would be done and the department would absorb the 7
positions. The amendment was necessary in order to keep the
department going.
Representative Knopp was concerned about the loss of
revenue if it was a result of a loss of production per
barrel receipts. He did not agree with the idea of losing
$400,000 in federal receipts. He asked if the state was
anticipating a decline in federal receipts. He needed
further detail.
Co-Chair Foster invited Representative Merrick to comment.
Representative Merrick would wait until another question
was presented.
Vice-Chair Ortiz shared Representative Josephson's
concerns. He stated that if the amendment saved UGF he
would take a strong look at supporting it. However, he
expressed concerns about losing federal receipts. There had
already been a 12 percent decrease in staffing in recent
years within SPAR. He also noted that SPAR had been
challenged with a 30 percent turnover rate in the prior
year. He thought the amendment would handcuff SPAR with
further reductions in federal receipts.
9:22:02 AM
Co-Chair Foster asked to hear from the Legislative Finance
Division (LFD).
ALEXEI PAINTER, ANALYST, LEGISLATIVE FINANCE DIVISION,
addressed Representative Knopp's question about the revenue
shortfall. He relayed that the revenue for the fund came
from a tax on oil production and a tax on refined fuels.
Oil production was declining and so was refined fuel
consumption. Both revenue sources were declining
simultaneously creating a hole in the fund. The balance of
the fund would fall below zero by the end of FY 24 which
included the reductions in the amendment. Without the
reduction, the fund would run out earlier in FY 24.
Representative Knopp thought it made sense to lay off
employees if the funding ran out. He thought it seemed odd
for the state to give up $400,000 when the issue could be
managed in the future in other ways.
Mr. Painter replied that the reduction was chosen because
the positions performed non-regulatory functions. The
Environmental Protection Agency (EPA) retained regulation
of the fuel tanks. Whereas, there were other activities in
which the EPA was the regulator. In the particular area
they were not the regulator.
Representative Merrick thought it was important to do what
the department was asking. It would help while a long-term
fix was being crafted.
Co-Chair Johnston MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Carpenter, Merrick, Sullivan-Leonard, Tilton
OPPOSED: Wool, Josephson, Knopp, LeBon, Ortiz, Foster,
Johnston
The MOTION to adopt Amendment H DEC 1 FAILED (4/7).
9:25:19 AM
Representative Merrick MOVED to ADOPT Amendment H DEC 2
(copy on file):
Water
H DEC 2 - Delete Ocean Ranger Program
Offered by Representative Merrick
1205 Ocn Ranger (Other) -3,426.0
Representative Josephson objected for discussion.
Representative Merrick explained the amendment would
eliminate the Ocean Ranger Program. The program was created
by a ballot initiative in 2006 and was funded by a
statutory $4 per berth fee on all commercial passenger
vessels with 250 berths or more. She suggested that
eliminating the program would not have significant impacts
on the regulation of cruise ships on Alaskan waters because
DEC would continue to permit and monitor for compliance
with state waste water and air quality permits and
regulations through records reviews, import inspections,
opacity monitoring, and vessel tracking. The Ocean Ranger
Program was provided through a contract. Out of the 22
Ocean Rangers, only 3 or 4 of them were residents of
Alaska. The department was currently working on a piece of
legislation which was in committee. There had been some
good committee hearings to revamp the program making it
more effective and making better use of the dollars paid
for by cruise ships.
Vice-Chair Ortiz spoke against the amendment. He relayed
that the subcommittee had considered the cut and had chosen
to reject it. He agreed that the department was putting
forward some plans that might show there would no longer be
a need to continue the program in the future. He had heard
loud and clear from coastal constituents that they wanted
the program to continue until a more robust replacement
came about. Until that time, the continuance of the program
was in the best interest of the state and coastal
residents.
Representative Sullivan-Leonard asked for an overview of
the Ocean Ranger Program. It was her understanding there
were employees on cruise ships monitoring the waste and
disposal systems. If Ocean Rangers were no longer on
vessels, she asked what DEC had planned for oversight.
Representative Merrick responded that there were people
onboard ships from the department that conducted
monitoring. It was her understanding that the Ocean Ranger
followed that person around. The program had the reputation
of being ineffective. She attested, having grown up in
Southeast Alaska, that the health and safety of Alaska's
waters were very important to her. She believed the state
needed to be a good steward of others' money as well and
put the funding to better use through a more effective
program.
Representative Sullivan-Leonard highlighted that there was
already oversight in place, meaning the program was
unnecessary. She asked if she was correct.
9:30:42 AM
Representative Merrick answered in the affirmative based on
her understanding.
Vice-Chair Ortiz did not know what kind of oversight there
would be in absence of the program. He did not know of
anyone else conducting oversight. There was potential in
the long-term for electronic monitoring of discharge and
similar items, but it was not in place yet. The idea that
an Ocean Ranger followed someone around was something he
had never heard. He pointed to the Coronavirus and the
worldwide issue taking place related to cruise ships. He
spoke about other items monitored by the Ocean Rangers
including food. He remarked that the rangers would not be
able to test for the virus, but they could alert others to
the potential hazard. He thought the elimination of the
program was premature.
Representative Sullivan-Leonard did not believe an Ocean
Ranger had oversight related to any illness on board -
there were medical personnel onboard the ships for that
purpose. She agreed that there was validity in not having
an Ocean Ranger onboard a vessel, particularly on cruise
ships. She agreed with Representative Merrick and supported
the amendment.
Representative Knopp remarked that the issue had been
discussed in committee the previous year. He had supported
its elimination the previous year, but the funding had not
been eliminated. He would not support the amendment at
present. He hoped legislation would be passed to cover the
issue. He agreed with Representative Sullivan-Leonard about
the expansion of duties of an Ocean Ranger and how they
were outside of the intention of the program. He reiterated
his lack of support for the amendment.
9:35:47 AM
Representative Josephson discussed that a number of
legislators had experiences that made them wonder what was
really taking place in the departments. He added that some
had the mantra "comply with the law." He pointed out that
the program followed a citizen-made law that he would
comply with. His understanding was the fees had been
collected and the department was using them for some other
DEC regulatory purpose rather than their intended purpose.
He asked why the legislature would delete fees the
department was using in some manner. He asked for further
clarification.
Vice-Chair Ortiz believed the amendment would not stop the
fee collection in any way. The program was funded by the
fees from passengers - the money was not UGF.
9:38:16 AM
AT EASE
9:42:31 AM
RECONVENED
Representative LeBon asked for clarification that the
action taken by the legislature the previous year had
eliminated the program, but the funding had continued to go
to the department.
Vice-Chair Ortiz answered that Ocean Rangers had been on
ships in the past summer. The legislature had not
eliminated the program, but the governor vetoed money to
eliminate the program. Due to the governor's action there
would not be a program in the coming summer. If the
legislature continued with the actions of the subcommittee
the program would be reinstituted the following summer.
Representative LeBon asked if the amendment would eliminate
the program but not the funding.
Vice-Chair Ortiz replied in the affirmative. The funding
mechanism stayed the same.
Representative Wool asked if the money was collected
specifically for the Ocean Ranger Program or whether it
could be used for other items. He asked if they would be in
violation if the funds continued.
Co-Chair Foster asked to hear from LFD.
Mr. Painter answered that the statute specified that the
Ocean Ranger fee of $4 could be spent only on the Ocean
Ranger Program. Federal law was looser, but the funds had
to be spent on something similar related to vessels.
Representative Wool suggested that if someone wanted to
eliminate the Ocean Ranger Program, the $4 fee should be
eliminated also.
9:46:27 AM
Representative Josephson asked for verification that the
amendment would not delete the program because it was a
statutory program.
Mr. Painter agreed that statutes could not be deleted
through the budget; they could only be defunded.
Representative Merrick provided wrap up on the amendment.
She believed the program was ineffective. She was confident
the department would come up with a better way to use the
dollars.
Co-Chair Johnston MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Carpenter, Merrick, Sullivan-Leonard, Tilton
OPPOSED: Josephson, Knopp, LeBon, Ortiz, Wool, Foster,
Johnston
The MOTION to adopt Amendment H DEC 2 FAILED (4/7).
9:48:20 AM
Representative Josephson MOVED to ADOPT Amendment H DFG 1
(copy on file).
Habitat
H DFG 1 - Restore Division Director
Offered by Representative Josephson
1004 Gen Fund (UGF) 202.7
Co-Chair Johnston OBJECTED for discussion.
Representative Josephson explained that the amendment and
the amendment that followed would restore division
directors in the Habitat Division. The subsequent amendment
would restore the position in the Subsistence Division. He
believed that the responsibilities of the Habitat and
Subsistence Programs were critical enough to Alaskans that
they required the focus of a director that could provide
rather than compete for the attention of the busy
department's deputy commissioner to whom the section now
reported to as shown in the division's current
organizational chart. He submitted the amendments only to
highlight the issue. He had intended to bring them to
disposition. However, he erroneously believed the dollars
still existed in the department even though they had been
cut. He withdrew the amendments.
Representative Josephson WITHDREW Amendments H DFG 1 and H
DFG 2 (copy on file).
State Subsistence Research & Monitoring
H DFG 2 - Restore division director position
Offered by Representative Josephson
1004 Gen Fund (UGF) 195.6
9:50:11 AM
Co-Chair Johnston MOVED to ADOPT Amendment H GOV 1 (copy on
file):
Office of Management and Budget
H GOV 1 - Restorative Justice Account Report Wordage
Offered by Representative Johnston
Co-Chair Foster OBJECTED for discussion.
Co-Chair Johnston explained the amendment. She indicated
the account was established in 2018 for the purpose of
assisting and paying victims' restitution and restoring
them to wholeness. Unfortunately, one year into the
creation of the account, the funds were already
insufficient to cover costs. The shortfall in funds was due
to low offender counts in 2019. In the future, the
legislature wanted the Office of Management and Budget
(OMB) to track the funds in the account. The intent of the
amendment was to ask OMB to report back on the use of the
remaining funds and to let the legislature know what is
intended for the future of the account.
Representative Sullivan-Leonard asked if there were any
funds in the account.
Co-Chair Johnston replied that there was a small amount in
the fund. She indicated that the Legislative Affairs Agency
brought the issue to her attention. Also, the author of the
bill in 2018 was looking to put a light on the situation.
Co-Chair Foster WITHDREW his OBJECTION.
There being NO OBJECTION, Amendment H GOV 1 was ADOPTED.
9:51:51 AM
Representative Josephson MOVED to ADOPT Amendment H HSS 1
(copy on file):
Behavioral Health
H HSS 1 - Restore Funding Removed in FY20
Offered by Representative Josephson
1037 GF/MH (UGF) 6,000.0
Co-Chair Johnston OBJECTED for discussion.
Representative Josephson explained how the amendment
evolved. He relayed that the behavioral health
appropriation had been reduced over the previous couple of
years. He found the funding to be important. He reminded
the committee that the legislature had specified in HB 39
[the FY 20 operating budget bill passed in 2019] an
appropriation of $6 million, albeit with a different
funding source. He continued that it was vetoed by the
governor on June 28, 2019. In July 2019, the legislature
reinserted the $6 million through HB 2001 [An appropriation
bill passed in 2019]. His staff reviewed the FY 20 budget
to determine all of the items that had been vetoed. The
public cared significantly about what had been vetoed which
he believed was the reason the governor did not veto as
much in August [2019].
Representative Josephson continued that it was positive
that through SB 74 [Legislation passed in 2016 regarding
Medicaid reform] the state was transitioning with federal
government 1115 waivers to fund programs. He learned, from
speaking with the Alaska State Hospital and Nursing Home
Association (ASHNHA) and others, that there were gaps. He
discovered that the waiver for substance abuse was in
place. However, it was not the case for mental health
treatment it would take affect July 1. He suggested that
even if there were systems built out to capture Medicaid
money, there were several providers who could not do so.
Part of the issue was that not all programs fit the
criteria for the 1115 waiver. He referenced Nugent's Ranch
in the Mat-Su. If a facility had more than 16 beds, such as
Nugent's Ranch, they did not get an IMD [Institutions for
Mental Diseases] exclusion. Therefore, they did not qualify
for all of the waiver. In addition, the Medicaid Program
had a limit of 30 days in some cases expandable to 60
days. Nugent's Ranch had individuals recovering who needed
a stay in duration of up to two years. He noted that Alaska
Youth and Family Network did not fit into the Medicaid box
either. He provided information about the program. Another
program, Set Free Alaska, did not qualify. The program
wanted to convert to billing Medicaid. However, it was
complicated moving from State resources to federal
resources.
Representative Josephson cited a letter from Tom Chard, CEO
of the Alaska Behavioral Health Association. Mr. Chard made
a strong argument confirming the issues the representative
had mentioned. He conveyed that Medicaid did not reimburse
grants for the services the program provided. In his
letter, Mr. Chard listed 18 different services provided by
the mental health community centers. The programs were
inexpensive compared to showing up at the emergency room
and Alaska Psychiatric Institute (API). He appreciated the
work of the subcommittee. He offered the amendment because
he wanted further discussion on behavioral health grants.
9:59:37 AM
AT EASE
10:01:36 AM
RECONVENED
Co-Chair Johnston appreciated Representative Josephson's
comments and his thorough research on the topic. However,
the subcommittee had come up with funding of a little over
$18 million for the grants. She agreed that the waivers
were coming out in steps. She had significant respect for
the department staff working long and hard hours to
establish the 1115 waivers. She discussed that it was a
year of transformation from a grant system to a billing
system within the department. The subcommittee had tried to
address the organizations that would not be able to adapt
to the billing system. She had concerns about appropriating
an additional $6 million because she did not know how the
department would deal with it. She would maintain the
subcommittee's approach and would vote against the
amendment.
Representative LeBon supported the amendment. He provided
detail. He discussed a facility in his district, Family-
Centered Services of Alaska (FCSA), providing behavioral
health services to children, adults, and families. The non-
profit was founded in Fairbanks in 1989. The entity started
providing services in the Mat-Su Valley in 2009 to allow
for a large number of children from the Valley going to
Fairbanks to receive services in their home community. He
reported that FCSA currently operated 14 distinct treatment
programs for children and young adults. Programs covered
the complete spectrum of treatment from outpatient to long-
term residential including day treatment, therapeutic
foster care, group homes, and other types of treatments.
Family-Centered Services of Alaska provided services to
approximately 200 children and families daily with a total
of 400 annually. The entity owned and provided services
from 20 facilities. He reported that 14 of the facilities
were in Fairbanks and 6 were in the Mat-Su Valley. The
entity designated and constructed 19 of the 20 facilities
to provide services to meet the specific needs of the
clients it served. The mission of FCSA was to serve Alaska
by providing family and child-centered services with
unconditional care. He thought the amendment was worth
supporting and appreciated the maker bringing it forward.
10:06:15 AM
Representative Wool shared that he had met with his local
hospital group the previous evening. Behavioral Health had
come up as a topic of discussion. He had heard there was a
large gap in most communities. Much of the time people were
taken to the emergency room, treated, and discharged. There
was a gap in what was available to individuals following
their hospital stay. Often individuals ended up back in the
emergency room or in jail. There was a gap in treatment
and, the state needed intermediary facilities including day
clinics, group homes, and places where people have access
to supervised treatment other than the ER, hospitals, or
jail. He supported the amendment. He asserted that prisons
should not be the first stop for folks.
Representative Sullivan-Leonard asked to hear from LFD. She
pointed to page 16 of the budget bill. She looked at the
amount already in the budget of $12.8 million. The
amendment showed an increase of $6 million. She asked for a
history regarding the behavioral health grant in recent
years. She wondered if there had been major reductions.
KELLY CUNNINGHAM, ANALYST, LEGISLATIVE FINANCE DIVISION,
answered that the behavioral health treatment and recovery
grants allocation had approximately $40 million in general
funds (GF). The amount was previously $18 million UGF. The
subcommittee did a fund change reflecting $12 million UGF.
The total GF, including designated general funds (DGF), was
about $40 million. There was about $11 million in federal
dollars. In the prior year the reduction to the allocation
was $12.2 million UGF. The legislature adopted about $6
million of the fund change and, the governor vetoed $6.1
million. She confirmed that the program had experienced a
reduction from the previous year to the current year.
Representative Sullivan-Leonard asked about the grants
currently being disbursed. She wondered if some of the
groups Representative Josephson highlighted were not
receiving grants presently. She queried whether the
amendment figure would be in addition to the behavioral
health grant.
10:10:34 AM
Ms. Cunningham responded that her question was not easy to
answer. She explained that the grantees of the 1115 waiver
could begin the transition of billing through Medicaid.
However, not all of the grantees had been able to do so.
She explained that the mental health piece of the 1115
waiver had not come online yet - it would occur in July.
Some uncertainty existed. The movement was to get most of
the grantees transferred to the Medicaid side. However,
there were some grantees that could not make the transition
as smoothly.
Representative Sullivan-Leonard asked if some programs
would fall through the cracks. She referenced Set Free
Alaska and wondered if the program would not be able to
provide services to their patients in the current and
following year waiting for the transition to the 1115
waiver program.
Ms. Cunningham replied there was grant money going out
presently. If a recipient was receiving a grant in the
current year, she was uncertain what would happen in the
following year.
Representative Tilton understood the need for behavioral
health services, but grants had been challenging for
several years. She wanted to be sure that dollars were
getting to individuals. She thought the state was looking
at a transformation to move away from the grant process to
a more streamlined process. Making such a change was
difficult. Some people might accept change easier than
others. She indicated that there were still dollars
available for those individuals who were in need and
waiting for the change to occur. She suggested the state
would have better controls in place to ensure that the
dollars reached clients. She would be supporting the chair
of the DHSS subcommittee in opposition of the amendment.
10:14:02 AM
Representative LeBon wondered if the House Finance
Committee had discussed the 1115 waiver in the previous
year. He asked if the legislature could anticipate a ruling
by the first of the coming fiscal year. He wondered about
the financial consequences of passing the amendment and the
waiver coming through.
Ms. Cunningham responded that the 1115 waiver substance
abuse portion was online. The mental health portion of the
1115 waiver was scheduled to come online July 1. She was
uncertain if the money would lapse or if providers would be
able to transfer to Medicaid. The question was currently
impossible to answer.
Representative LeBon appreciated the response. He did not
see the amendment causing any damage if the worst outcome
was that the money lapsed.
Co-Chair Johnston spoke of the difference between the
current year and the prior year. In the previous year the
1115 waiver was approved. In the current year the waiver
was being implemented through an approval process. In the
prior year the state was waiting for approval from the
federal government.
Representative LeBon wondered if, effective July 1, 2020,
the funding in the amount of $6 million would be handled by
the 1115 waiver.
Co-Chair Johnston replied there was a transition from
billing to grants. There were entities that would never be
able to bill Medicaid because there were more community
services. The state was in a transition between a billing
system and a grant program.
10:16:48 AM
Representative Wool asked for the UGF funding amounts of
the program for the previous 4 or 5 years.
Ms. Cunningham answered that she had actuals from FY 15 for
the whole program. She did not have the funds split. She
began with FY 15 in the amount of $62.7 million; FY 16 in
the amount of $63.2 million; FY 17 in the amount of $58.6
million; FY 18 in the amount of $54.7 million; and FY 19 in
the amount of $61.2 million.
Representative Wool clarified that Ms. Cunningham had
supplied combined totals of UGF and DGF.
Ms. Cunningham replied that the totals also included
federal dollars.
Representative Wool asked for the total in FY 20.
Ms. Cunningham relayed that the total for FY 20 was $51.7
million. She indicated that about $40 million of the total
were GF and about $11 million were federal funds.
Representative Wool wondered if the ratios were fairly
consistent in previous years.
Ms. Cunningham would have to follow up.
Representative Wool asked for the total in FY 21.
Ms. Cunningham replied $51 million - $40 million GF and $11
million in federal funds. There was an $11.4 million fund
change in the governor's budget changing the funding from
UGF to DGF. However, the general fund amount of $40 million
did not change. The amendment would increase the general
fund amount to $46 million.
Representative Wool asked if there was a history of the
amount the 1115 waiver was bringing in. He suggested there
would not be a historical amount, as it was new to Alaska.
Ms. Cunningham concurred.
Co-Chair Johnston MAINTAINED her OBJECTION.
10:20:00 AM
Representative Josephson forgot to mention that Medicaid
covered the poorest population. He understood that the
amendment would allow eligibility for folks that did not
qualify for Medicaid. There were some programs that were
Alaska tailored that would never fit in a square peg or a
round hole, yet they had remarkable success. There were
programs that could not be constrained by Medicaid to be
effective.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, LeBon, Ortiz, Wool, Foster
OPPOSED: Knopp, Merrick, Sullivan-Leonard, Tilton,
Carpenter, Johnston
The MOTION to adopt Amendment H HSS 1 FAILED (5/6).
10:22:03 AM
AT EASE
10:22:26 AM
RECONVENED
HB 205 was HEARD and HELD in committee for further
consideration.
HB 206 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the schedule for the afternoon
meeting.
| Document Name | Date/Time | Subjects |
|---|