Legislature(2017 - 2018)ADAMS ROOM 519

03/06/2018 01:00 PM FINANCE

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Audio Topic
01:06:03 PM Start
01:06:43 PM HB285 || HB286
01:06:48 PM Amendments
05:03:53 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 286 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= HB 285 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
Amendments
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 6, 2018                                                                                            
                         1:06 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:06:03 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Seaton  called the House Finance  Committee meeting                                                                    
to order at 1:06 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Morgan  Foss, Legislative  Liaison, Department  of Fish  and                                                                    
Game;  Shawn Henderson,  Administrative Services,  Office of                                                                    
the  Governor;  Guy  Bell, Former  Director,  Administrative                                                                    
Services,   Office  of   the   Governor;  Shawnda   O'Brien,                                                                    
Assistant  Commissioner,  Department  of Health  and  Social                                                                    
Services;  Lacey   Sanders,  Analyst,   Legislative  Finance                                                                    
Division; Jon  Sherwood, Deputy Commissioner,  Department of                                                                    
Health  and  Social  Services;  Kelly  Cunningham,  Analyst,                                                                    
Legislative Finance Division; Representative Mark Neuman.                                                                       
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Carol  Petraborg,   Director,  Division   of  Administrative                                                                    
Services, Fish and Game.                                                                                                        
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 285    APPROP: MENTAL HEALTH BUDGET                                                                                          
                                                                                                                                
          HB 285 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
HB 286    APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          HB 286 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
AMENDMENTS                                                                                                                      
                                                                                                                                
Co-Chair Seaton reviewed the agenda for the meeting.                                                                            
                                                                                                                                
HOUSE BILL NO. 285                                                                                                            
                                                                                                                                
     "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."                                                                                                        
                                                                                                                                
HOUSE BILL NO. 286                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;  making   supplemental  appropriations;                                                                    
     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."                                                                                                        
                                                                                                                                
1:06:43 PM                                                                                                                    
                                                                                                                                
^AMENDMENTS                                                                                                                   
                                                                                                                                
1:06:48 PM                                                                                                                    
                                                                                                                                
Representative Tilton MOVED to ADOPT Amendment H DFG 21                                                                         
(copy on file):                                                                                                                 
                                                                                                                                
     Statewide Support Services                                                                                                 
     Commissioner's Office                                                                                                      
     H  DFG  21  - Intent  language  to  establish  research                                                                    
     priorities.                                                                                                                
     Offered by Representative Tilton                                                                                           
                                                                                                                                
     Wordage: It is  the intent of the  Legislature that the                                                                    
     Commissioner of  the Department of  Fish and  Game work                                                                    
     with  Boards of  Fish  and Game  to establish  research                                                                    
     priorities   for  future   projects,  and   that  those                                                                    
     priorities be  transmitted to the  legislature annually                                                                    
     to be considered during the budget process.                                                                                
                                                                                                                                
     Explanation:  Establishing a  list of  projects with  a                                                                    
     priority will assist the  legislature in allocating the                                                                    
     appropriate level of funding.                                                                                              
                                                                                                                                
Representative Ortiz OBJECTED for discussion.                                                                                   
                                                                                                                                
Representative Tilton  read the  amendment (see  above). She                                                                    
elaborated  that the  Board of  Fisheries and  the Board  of                                                                    
Game were created to allocate  the state's resources between                                                                    
their user groups.  In both instances they  met regularly to                                                                    
determine  priorities. Establishing  a list  of projects  in                                                                    
priority  would   help  the  legislature  when   looking  at                                                                    
funding.                                                                                                                        
                                                                                                                                
Representative   Ortiz   asked  if   Representative   Tilton                                                                    
believed it was  important for the Board of  Fisheries to be                                                                    
an independent entity from the  Department of Fish and Game.                                                                    
Representative Tilton  believed that the Board  of Fisheries                                                                    
and  Board of  Game  were created  to  help the  legislature                                                                    
understand  where to  allocate state  resources. She  argued                                                                    
that having  a priority list  would help the  legislature to                                                                    
better  understand  where  to   allocate  funds  during  the                                                                    
budgeting process. The boards  were representations of their                                                                    
specific industries.                                                                                                            
                                                                                                                                
1:09:07 PM                                                                                                                    
                                                                                                                                
Representative Ortiz stated that  the Board of Fisheries was                                                                    
charged  with making  allocative  and regulatory  decisions.                                                                    
Biologists provided objective assessment  data to inform the                                                                    
decisions. He  believed, the request for  the commissioner's                                                                    
office to work with and,  in essence, influence the Board of                                                                    
Fisheries was inappropriate. He  suggested that if the Board                                                                    
of  Fisheries wanted  to influence  the  assessments of  the                                                                    
Department  of  Fish  and Game  (DFG)  they  were  budgetary                                                                    
decisions that belonged with the  department. He thought the                                                                    
amendment blurred the line he  thought was necessary between                                                                    
the Board and DFG.                                                                                                              
                                                                                                                                
Representative Wilson admitted that she  had never been to a                                                                    
Board  of  Fisheries  meeting.  However,  she  had  been  to                                                                    
numerous  Board  of  Game   meetings.  She  appreciated  the                                                                    
remarks  by  Representative  Ortiz and  thought  the  people                                                                    
influencing the  board were people from  the department. She                                                                    
suggested that  if the legislature wanted  the department to                                                                    
be independent from the board,  then perhaps they should not                                                                    
be  attending   the  meetings  and  providing   all  of  the                                                                    
information.  She agreed  that there  was a  large influence                                                                    
occurring currently. She thought  the intent language of the                                                                    
amendment was  saying that  all three  groups needed  to sit                                                                    
down together. The Board of  Fisheries and the Board of Game                                                                    
were who  the legislature  had inserted. She  continued that                                                                    
some of the biggest priorities  of the state fell within the                                                                    
purview of  the Board  of Fisheries and  the Board  of Game.                                                                    
She thought that if the  three entities were all going their                                                                    
own  way, things  would  not get  prioritized.  She did  not                                                                    
believe  the amendment  was  about  influence. However,  she                                                                    
wanted  to see  the  current influence  halted  and for  the                                                                    
boards to  become more independent.  She thought  the intent                                                                    
of the amendment was to  encourage all three entities to sit                                                                    
down  together at  the table  to  figure out  a path  moving                                                                    
forward  and  to  prioritize  funding.  She  did  not  think                                                                    
influence had anything to do with the amendment.                                                                                
                                                                                                                                
Representative  Tilton   believed  the   amendment,  brought                                                                    
forward from another  member from Big Lake, was  a result of                                                                    
the  Board  of  Fisheries  and the  Board  of  Game  meeting                                                                    
regularly and  having priorities.  It was important  for the                                                                    
legislature  to take  notice of  their priorities  with some                                                                    
sort  of listing  that  they could  use  when making  budget                                                                    
decisions. Currently,  the boards  were not  providing their                                                                    
information  to the  legislature.  The  legislature was  not                                                                    
able to take the board's priorities into consideration.                                                                         
                                                                                                                                
Co-Chair Seaton had been to  numerous Board of Fisheries and                                                                    
Board  of Game  meetings.  The board  meetings mostly  dealt                                                                    
with  proposed   regulations.  He  reported   that  research                                                                    
priorities were established  primarily by the commissioner's                                                                    
office. He  opined that the  amendment, as written,  did not                                                                    
indicate that the boards would be  tasked with a new job. He                                                                    
reported that  the schedule  of the  Board of  Fisheries was                                                                    
very   packed.   He   suggested  that   working   with   the                                                                    
commissioner  was something  the board  would do.  He stated                                                                    
that the amendment did not  specify that the recommendations                                                                    
would  come  from  the  Board  of  Fisheries  but  that  the                                                                    
commissioner would  work with the board  to determine future                                                                    
projects. He  thought the legislature  would be  enhanced by                                                                    
receiving information about future  projects in priority. He                                                                    
suggested hearing from the department.                                                                                          
                                                                                                                                
1:14:39 PM                                                                                                                    
                                                                                                                                
Representative Ortiz could not  speak to the relationship of                                                                    
DFG and the Board of Game,  as he had never attended a Board                                                                    
of  Game   meeting.  However,  he  had   attended  Board  of                                                                    
Fisheries  meetings. The  Department  of Fish  and Game  was                                                                    
present and  provided comments on certain  proposed projects                                                                    
from  the  Board  of  Fisheries.  He  reported  there  being                                                                    
cooperation  between  DFG and  the  Board  of Fisheries.  He                                                                    
thought there  were two things  being discussed.  He thought                                                                    
the issue  brought up by the  member from Big Lake  had more                                                                    
to  do with  the Board  of Game.  In Representative  Ortiz's                                                                    
experience   there  had   been   communication  and   active                                                                    
involvement between the  Board of Fisheries and  DFG. He did                                                                    
not see where the amendment was needed.                                                                                         
                                                                                                                                
MORGAN  FOSS, LEGISLATIVE  LIAISON, DEPARTMENT  OF FISH  AND                                                                    
GAME, stated that the department  might benefit from further                                                                    
information about the intent of the amendment.                                                                                  
                                                                                                                                
Representative  Tilton  clarified  that the  intent  of  the                                                                    
amendment  was not  for  DFG  to tell  the  board what  they                                                                    
should  be  looking  at. The  amendment  would  require  the                                                                    
boards to  work with  the department on  a priority  list of                                                                    
projects. The list could be  provided to legislators so that                                                                    
the legislature could better prioritize when budgeting.                                                                         
                                                                                                                                
Co-Chair Seaton objected to the  amendment. He did not think                                                                    
the  Board of  Fisheries  needed to  be  tasked with  coming                                                                    
forward  with a  prioritization  of projects.  The Board  of                                                                    
Fisheries  had   specific  tasks  including   taking  public                                                                    
comments,  compiling a  book of  proposals for  regulations,                                                                    
and dealing with  the regulations. He did not  want to throw                                                                    
another large task at the  Board of Fisheries. The board was                                                                    
already meeting for up to two weeks at a time.                                                                                  
                                                                                                                                
1:18:24 PM                                                                                                                    
                                                                                                                                
Representative   Wilson  countered   that   they  were   the                                                                    
legislature's boards.  She reported that the  boards used to                                                                    
have joint meetings. She thought  the amendment might not be                                                                    
necessary if they were to  meet jointly more frequently. She                                                                    
thought they already had priorities.  She did not believe it                                                                    
would cost anything or add to the agenda.                                                                                       
                                                                                                                                
Representative Ortiz MAINTAINED his OBJECTION.                                                                                  
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson, Grenn                                                                               
OPPOSED: Gara, Guttenberg, Kawasaki, Ortiz, Seaton, Foster                                                                      
                                                                                                                                
The MOTION to adopt Amendment H DFG 21 FAILED (5/6).                                                                            
                                                                                                                                
1:20:20 PM                                                                                                                    
                                                                                                                                
Representative Wilson requested to consider H DFG 22, H DFG                                                                     
23, H DFG 24 simultaneously.                                                                                                    
                                                                                                                                
Representative Wilson MOVED to ADOPT Amendments H DFG 22, H                                                                     
DFG 23, H DFG 24 (copy on file):                                                                                                
                                                                                                                                
H DFG 22:                                                                                                                       
                                                                                                                                
     Statewide Support Services                                                                                                 
     Administrative Services                                                                                                    
     H DFG 22 - 3003: Information Technology                                                                                    
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     FY17  Actuals  were  $683.5  and  the  FY19  Governor's                                                                    
     budget request  is $986.1. A  decrement of  $100.0 will                                                                    
     result  in  a  FY  19  budget  request  of  $886.1  for                                                                    
     Information  Technology,  $202.6   over  FY  17  actual                                                                    
     expenditures.                                                                                                              
                                                                                                                                
H DFG 23:                                                                                                                       
                                                                                                                                
     Statewide Support Services                                                                                                 
     Administrative Services                                                                                                    
     H DFG 23 - 3001: Financial Services                                                                                        
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     FY17  Actuals  were  $234.6  and  the  FY19  Governor's                                                                    
     budget  request is  $346.8. A  decrement of  $50.0 will                                                                    
     result  in  a  FY  19  budget  request  of  $296.8  for                                                                    
     Financial   Services,   $62.2   over   FY   17   actual                                                                    
     expenditures.                                                                                                              
                                                                                                                                
H DFG 24:                                                                                                                       
                                                                                                                                
     Statewide Support Services                                                                                                 
     Administrative Services                                                                                                    
     H DFG 24 - 3011: Other Services                                                                                            
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     FY17  Actuals  were  $580.3  and  the  FY19  Governor's                                                                    
     request is $682.1. A decrement  of $50.0 will result in                                                                    
     a FY  19 budget request  of $632.1 for  Other Services,                                                                    
     which is $51.8 over FY 17 actual expenditures                                                                              
                                                                                                                                
Representative Ortiz OBJECTED for discussion.                                                                                   
                                                                                                                                
Representative Wilson read the amendments (see above).                                                                          
                                                                                                                                
Representative  Ortiz  asked  if Representative  Wilson  had                                                                    
spoken  with   the  department  about  the   impact  of  the                                                                    
amendments. Representative  Wilson replied that she  had not                                                                    
contacted  the  department,  nor   did  she  hear  from  the                                                                    
department about  a negative or  positive opinion  about the                                                                    
amendments.                                                                                                                     
                                                                                                                                
Representative  Ortiz  asked  if   she  had  looked  at  the                                                                    
particular  funding sources  for the  proposed expenditures.                                                                    
Representative  Wilson  replied affirmatively.  She  started                                                                    
with personal services, making sure  that she backed out all                                                                    
general funds  and federal  dollars. Personal  services were                                                                    
not affected.  She indicated it  could be moved up  and down                                                                    
on the scale and was available in the specified area.                                                                           
                                                                                                                                
Representative   Ortiz   answered   that   funding   sources                                                                    
mattered. The net impact of  all three amendments removed at                                                                    
total  of  $200,000  from  the  Division  of  Administrative                                                                    
Services; it  was below actual expenditures  at $126,700. It                                                                    
was 6 percent below the FY  17 actual expenditures. In FY 17                                                                    
all but  $46,700 UGF was  expended. The unexpended  fund was                                                                    
$1.4  million  of federal  receipts  and  $536,000 of  other                                                                    
funds.  He expressed  concerns about  impacting services  by                                                                    
removing  UGF  because  of  there   being  $1.2  million  in                                                                    
uncollectable  receipts. He  thought  other funding  sources                                                                    
were being  mixed in with  UGF funding sources.  He believed                                                                    
the  net  impact  of  the   amendments  would  result  in  a                                                                    
significant reduction of services.                                                                                              
                                                                                                                                
1:25:01 PM                                                                                                                    
                                                                                                                                
Representative  Pruitt   asked  why  the   department  would                                                                    
continue to  ask for  the federal  funding annually  when it                                                                    
knew it  would not  receive the full  amount. The  state was                                                                    
having to backfill with UGF.                                                                                                    
                                                                                                                                
Representative Wilson  provided wrap  up on  the amendments.                                                                    
She found  it interesting,  looking at  FY 17  actuals, that                                                                    
the  state only  received  $556,300 of  federal dollars.  In                                                                    
FY 18 the department  anticipated $1.7 million and  in FY 19                                                                    
it expected  to have  $1.7 million.  She wondered  where the                                                                    
department got  its figures when  it only  received $556,000                                                                    
in FY 17.  The department had $2.1 million  in general funds                                                                    
(the   amendments  were   under  administrative   services).                                                                    
However, the department budgeted  the same amount of $1.9916                                                                    
million for FY  18 and in FY 19. She  continued that general                                                                    
fund programing  of the DGF  that was discussed  earlier was                                                                    
$143,000  in FY  17.  She highlighted  that  the amount  was                                                                    
close to the  budget amount of $146,000 in FY  18 and FY 19.                                                                    
The  department also  received other  funding including  CIP                                                                    
receipts  and STAT.  They spent  less  in personal  services                                                                    
dropping from  $7.6 million to  $5.5 million.  Services grew                                                                    
from actuals of $3.1 million  to a $5.6 million margin, even                                                                    
though under the  FY 18 management plan  the department only                                                                    
had  $3.9 million.  They  went up  another  $1.5 million  in                                                                    
services  from  FY  18  to  FY 19.  She  indicated  that  it                                                                    
reflected an increase in services of $1.7 million.                                                                              
                                                                                                                                
Vice-Chair Gara  stated that the numbers  were not accurate.                                                                    
Representative Wilson was including the federal numbers.                                                                        
                                                                                                                                
Representative Wilson  stated that she included  the federal                                                                    
numbers. The  department had the  federal receipts  as well.                                                                    
She   was  very   specific  about   the   funding  and   its                                                                    
composition.                                                                                                                    
                                                                                                                                
Representative Ortiz MAINTAINED his OBJECTION.                                                                                  
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Thompson, Tilton, Wilson, Pruitt                                                                                      
OPPOSED: Gara,  Grenn, Guttenberg, Kawasaki,  Ortiz, Foster,                                                                    
Seaton                                                                                                                          
                                                                                                                                
The MOTION  to adopt Amendments  H DFG 22,  H DFG 23,  and H                                                                    
DFG 24 FAILED (4/7).                                                                                                            
                                                                                                                                
1:28:32 PM                                                                                                                    
                                                                                                                                
Representative  Wilson MOVED  to  ADOPT Amendment  H DFG  25                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Statewide Support Services                                                                                                 
     Boards of Fisheries and Game                                                                                               
     H DFG 25 - 3011: Other Services                                                                                            
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     FY17 Actuals were $12.3 and  the FY19 Governor's budget                                                                    
     request is $153.2. A decrement  of $50.0 will result in                                                                    
     a  FY 19  budget request  of $103.2  in Other  Services                                                                    
     which is $90.9 over FY 17 actual expenditures.                                                                             
                                                                                                                                
Vice-Chair Gara OBJECTED for discussion.                                                                                        
                                                                                                                                
Representative Wilson read the amendment (see above).                                                                           
                                                                                                                                
Vice-Chair Gara spoke  about what the state  could afford to                                                                    
provide. He  discussed significant  cuts over  recent years.                                                                    
He  wanted  to be  clear  about  whether the  committee  was                                                                    
talking about state funds or federal funds being leveraged.                                                                     
                                                                                                                                
Representative  Ortiz  read  from a  prepared  statement  in                                                                    
opposition to  the amendment.  Amendment 25  removed $50,000                                                                    
from  the Board  of  Fisheries  and the  Board  of Game.  He                                                                    
reported that  UGF was $7.1  million or 6 percent  above the                                                                    
FY 17  actual expenditures. In  FY 17, all but  $2.6 million                                                                    
UGF  was  expended.  The unexpended  funding  was  primarily                                                                    
other  funding   including  CIP,  SDPR,  and   IA  receipts.                                                                    
Increases  in  UGF  were  due  to  the  increase  in  health                                                                    
insurance  premiums. Removing  UGF  would be  uncollectable.                                                                    
Other  funds  would impact  services.  In  other words,  the                                                                    
reason  for the  request in  funding for  the line  item was                                                                    
because  of an  increase  in health  insurance premiums.  He                                                                    
suggested that  if the  legislature were  to cut  the funds,                                                                    
the  department would  still  have to  pay  the increase  in                                                                    
health  insurance premiums  but  would be  forced to  reduce                                                                    
services  in other  areas to  compensate  for the  increased                                                                    
health care costs.                                                                                                              
                                                                                                                                
Representative  Pruitt needed  to  know  why healthcare  was                                                                    
projected to increase 12.5 times  what the total expenditure                                                                    
was in other  services. He was aware that  health care costs                                                                    
were skyrocketing, but  he did not know why  the expense was                                                                    
budgeted for 12.5 times what it cost in FY 17.                                                                                  
                                                                                                                                
Representative   Ortiz   wondered   if  someone   from   the                                                                    
department was available.                                                                                                       
                                                                                                                                
1:32:36 PM                                                                                                                    
                                                                                                                                
CAROL  PETRABORG,   DIRECTOR,  DIVISION   OF  ADMINISTRATIVE                                                                    
SERVICES, FISH  AND GAME (via teleconference),  relayed that                                                                    
in   FY  17   the  department   consolidated  Administrative                                                                    
Services within all of the  small divisions. It reflected in                                                                    
all of the  small divisions - the reductions  were taken out                                                                    
of personal  services and the services  lines were increased                                                                    
to pay for administrative support.                                                                                              
                                                                                                                                
Co-Chair Seaton  surmised it  was not  IA receipts  but each                                                                    
division   paying  for   their  portion   of  administrative                                                                    
support.   Ms.   Petraborg  responded   affirmatively.   She                                                                    
expounded that  prior to FY  17, the amount would  have come                                                                    
out  of each  division's  personal  services. Each  division                                                                    
paid  through   their  services   line  -  IA   receipts  to                                                                    
administrative services.                                                                                                        
                                                                                                                                
Representative Wilson provided wrap up.                                                                                         
                                                                                                                                
Vice-Chair Gara MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Tilton, Wilson, Pruitt, Thompson                                                                                      
OPPOSED: Gara,  Grenn, Guttenberg, Kawasaki,  Ortiz, Seaton,                                                                    
Foster                                                                                                                          
                                                                                                                                
The MOTION to adopt Amendment H DFG 25 FAILED (4/7).                                                                            
                                                                                                                                
1:35:29 PM                                                                                                                    
                                                                                                                                
Representative  Wilson MOVED  to  ADOPT Amendment  H DFG  26                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Statewide Support Services                                                                                                 
     Habitat                                                                                                                    
     H DFG 26 - 4000 Business                                                                                                   
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     FY17 Actuals were $39.9 and the FY19 Governor's budget                                                                     
     request is $106.2. A decrement of $50.0 will result in                                                                     
     a FY 19 budget request of $56.2 in Business                                                                                
    Commodities, $16.3 over FY 17 actual expenditures.                                                                          
                                                                                                                                
Representative Ortiz OBJECTED.                                                                                                  
                                                                                                                                
Representative Wilson read the amendment (see above).                                                                           
                                                                                                                                
Representative Ortiz  indicated it was the  same issue about                                                                    
increases  for health  insurance  that  caused the  increase                                                                    
request.                                                                                                                        
                                                                                                                                
Representative Wilson  provided wrap up. She  indicated that                                                                    
the amendment address commodities  rather than services. She                                                                    
did not think  the state was purchasing  health in insurance                                                                    
in commodities.  Federal receipts were $109,200  and general                                                                    
receipts equaled  $3.577 million. The reduction  was $50,000                                                                    
in commodities. Individuals  would still be able  to pay for                                                                    
their health insurance.                                                                                                         
                                                                                                                                
Representative Ortiz MAINTAINED his OBJECTION.                                                                                  
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Wilson, Grenn, Pruitt, Thompson, Tilton                                                                               
OPPOSED: Gara, Guttenberg, Kawasaki, Ortiz, Foster, Seaton                                                                      
                                                                                                                                
The MOTION to adopt Amendment H DFG 26 FAILED (5/6).                                                                            
                                                                                                                                
1:37:32 PM                                                                                                                    
                                                                                                                                
Representative  Wilson MOVED  to  ADOPT Amendment  H DFG  27                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Statewide Support Services                                                                                                 
     State Subsistence Research                                                                                                 
     H DFG 27 - 3011: Other Services                                                                                            
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     FY17  Actuals  were  $288.1  and  the  FY19  Governor's                                                                    
     budget request  is $464.2. A  decrement of  $100.0 will                                                                    
     result in  a FY 19  budget request of $364.2  for Other                                                                    
     Services, $76.1 over FY 17 actual expenditures.                                                                            
                                                                                                                                
Representative Ortiz OBJECTED.                                                                                                  
                                                                                                                                
Representative Wilson presented the amendment (see above).                                                                      
                                                                                                                                
Representative  Ortiz  offered  that the  amendment  removed                                                                    
$100,000  from  the  services  line  for  state  subsistence                                                                    
research. He  noted that UGF  in state  subsistence research                                                                    
was $18,000 or  .7 above the FY 17  actual expenditures. The                                                                    
increase  included  $21,400  of  UGF  increases  for  health                                                                    
insurance in FY 18 and FY 19. In  FY 17 all but $1.4 UGF was                                                                    
expended removing  $50,000 UGF  because there was  an excess                                                                    
authorization   in  other   funds,  primarily   federal  and                                                                    
interagency receipts would impact services.                                                                                     
                                                                                                                                
Representative Ortiz MAINTAINED his OBJECTION.                                                                                  
                                                                                                                                
Representative  Wilson provided  wrap up  on the  amendment.                                                                    
She thought  she heard  that $21,000  was needed  for health                                                                    
insurance. She left  $76,100 in the account.  She added that                                                                    
she left  $600,000 in personal  services, even  though there                                                                    
was  a decrease  in  the  number of  people.  She also  left                                                                    
$10,000  in travel,  $100,000 in  services, and  $140,000 in                                                                    
commodities. She  indicated she was referring  to the period                                                                    
between FY 17  and FY 19. There was $2.5  million in general                                                                    
funds and $1.3 million in federal receipts.                                                                                     
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Kawasaki,  Ortiz, Gara, Grenn,  Guttenberg, Seaton,                                                                    
Foster                                                                                                                          
                                                                                                                                
The MOTION to adopt Amendment H DFG 27 FAILED (4/7).                                                                            
                                                                                                                                
1:40:20 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  MOVED to  ADOPT  Amendment  H GOV  1                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Executive Operations                                                                                                       
     Executive Office                                                                                                           
     H GOV 1 - Personal Services Reduction                                                                                      
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     The FY  18 Personal  Services vacancy factor  was 4.61%                                                                    
     and totaled  $433.8 resulting in  post-vacancy Personal                                                                    
     Services line  item authorized budget of  $8,980.6. The                                                                    
     FY 19  Governor's budget request  has a  vacancy factor                                                                    
     of  0.74%  and  totals  $68.1 with  a  FY  19  Personal                                                                    
     Services line item request  of $9,130.6. This amendment                                                                    
     increases the  FY 19 vacancy factor  request from 0.74%                                                                    
     to  2.37% which  results in  a decrement  of $150.0  in                                                                    
     this  allocation. A  vacancy factor  of  2.37% is  less                                                                    
     than half of  the FY 18 vacancy factor  and will reduce                                                                    
     the  Governor's  FY  19  Personal  Services  line  item                                                                    
     request from $9,130.6 to  $8,980.6. This amount matches                                                                    
     the FY 18 authorized budget of $8,980.6                                                                                    
                                                                                                                                
Co-Chair Seaton OBJECTED.                                                                                                       
                                                                                                                                
Representative Wilson presented the amendment (see above).                                                                      
                                                                                                                                
Co-Chair  Seaton spoke  to his  objection. He  conveyed that                                                                    
while the executive office  personal services vacancy factor                                                                    
appeared  to  be lowered  than  the  guidelines set  by  the                                                                    
Office of  Management and Budget  (OMB), there  were several                                                                    
non-permanent  employees  not  included in  the  budget  who                                                                    
would  still be  on  the board  in FY  19.  They included  a                                                                    
special agent, a constituent  relations staff, a procurement                                                                    
agent,  a  special assistant  for  cultural  affairs, and  a                                                                    
special  project support  person.  Once the  costs of  those                                                                    
positions  were  recognized,  the executive  office  vacancy                                                                    
factor  was $432,082.  The vacancy  factor was  4.52 percent                                                                    
within OMB guidelines. He opposed the amendment.                                                                                
                                                                                                                                
Representative  Thompson asked  for clarification  about the                                                                    
three or  four positions. He  was unclear whether  they were                                                                    
in the  budget. Co-Chair Seaton answered  that the positions                                                                    
were for non-permanent employees.                                                                                               
                                                                                                                                
SHAWN  HENDERSON,  ADMINISTRATIVE  SERVICES, OFFICE  OF  THE                                                                    
GOVERNOR,  answered  that  the vacant  positions  were  non-                                                                    
permanent  positions  hired   under  an  employment  service                                                                    
agreement. There were several  positions including a special                                                                    
agent,  a   procurement  agent,  a  special   assistant  for                                                                    
cultural   affairs,   a   projects,   policy   and   program                                                                    
specialist.  Adding  the  non-permanent positions  into  the                                                                    
budget  increased  the  vacancy  factor to  4.52  which  was                                                                    
within the OMB guidelines.                                                                                                      
                                                                                                                                
Representative Pruitt  asked if the positions  Mr. Henderson                                                                    
had highlighted  were currently filled within  the Office of                                                                    
the Governor. Mr. Henderson replied in the affirmative.                                                                         
                                                                                                                                
Representative  Pruitt  asked  if  the  additional  $150,000                                                                    
requested was  to cover increases  in salary. He  asked what                                                                    
the amount was for.                                                                                                             
                                                                                                                                
GUY BELL,  FORMER DIRECTOR, ADMINISTRATIVE  SERVICES, OFFICE                                                                    
OF THE GOVERNOR, answered that  $150,000 was included in the                                                                    
FY  19  budget as  a  line  item transfer  from  contractual                                                                    
services. The Office of Management  and Budget brought money                                                                    
into  personal services  from  contractual services  because                                                                    
the  department  brought  3 positions  back  that  had  been                                                                    
transferred to  the Department of Administration  for shared                                                                    
services and IT  and used the additional  authority to cover                                                                    
the cost of those positions.                                                                                                    
                                                                                                                                
1:46:41 PM                                                                                                                    
                                                                                                                                
Representative  Wilson   asked  about  vacancy   rates.  She                                                                    
wondered  about  a  higher  vacancy  rate  and  whether  the                                                                    
department  would have  to leave  more  months open  without                                                                    
hiring the  positions. Mr. Bell replied  in the affirmative.                                                                    
He  elaborated that  the vacancy  factor was  the difference                                                                    
between 100  percent of the  cost of positions for  the full                                                                    
year versus  the amount of funding  the department received.                                                                    
The  difference needed  to be  covered by  vacancies through                                                                    
the course of a year.                                                                                                           
                                                                                                                                
Representative  Wilson asked  if a  decrease in  the vacancy                                                                    
rate  would allow  the  department to  have  more money  for                                                                    
personal  services for  the contracts.  Mr. Bell  replied in                                                                    
the affirmative.  The department  would be able  to maintain                                                                    
the same  vacancy factor and still  retain certain employees                                                                    
under employment contracts.                                                                                                     
                                                                                                                                
Representative Wilson  asked why  they did  not ask  for the                                                                    
increase of  $150,000 and leave  the vacancy rate  the same.                                                                    
She  thought it  would have  been more  transparent to  show                                                                    
that  there was  an  increase to  personal  services in  the                                                                    
Office of the Governor's budget.  Mr. Bell answered that the                                                                    
positions  brought back  and funded  with the  transfer from                                                                    
contractual services  were permanent positions  currently in                                                                    
the budget. However,  they were not in the  authorized FY 18                                                                    
budget.                                                                                                                         
                                                                                                                                
Representative  Wilson asked  if Mr.  Bell was  referring to                                                                    
the three positions  that had been brought  back from shared                                                                    
services to  the Office  of the Governor.  She asked  if the                                                                    
funding  went  with  the  three  positions  or  whether  the                                                                    
funding was left in shared services.                                                                                            
                                                                                                                                
Mr.   Bell  answered   that  funding   had  never   actually                                                                    
transferred over to shared services.  The money was moved to                                                                    
contractual services  within the executive office  to pay by                                                                    
a reimbursable services agreement  for the positions. It was                                                                    
a line item  transfer which could be found in  an IA receipt                                                                    
authority in shared services.                                                                                                   
                                                                                                                                
Representative  Wilson thought  Mr. Bell  was saying  it had                                                                    
changed because  there were  more people  being paid  in the                                                                    
governor's  office  than  in   FY  18.  Mr.  Bell  responded                                                                    
positively.                                                                                                                     
                                                                                                                                
Vice-Chair  Gara respected  what the  governor's office  had                                                                    
tried to  do, as the governor  had tried to lead  by example                                                                    
when he  was elected. He knew  there had to be  budget cuts.                                                                    
He  tried  to  spare  the   budget  cuts  that  hurt  people                                                                    
personally by cutting his own  budget. He reported there had                                                                    
been  a 25  percent cut  in the  governor's office,  over $8                                                                    
million  since 2015.  He did  not  have a  problem with  the                                                                    
governor trying  to hire back  a couple of  part-time people                                                                    
to make  things work.  The office  had been  cut by  over $8                                                                    
million.  He  believed  the  governor's  spending  had  been                                                                    
responsible.                                                                                                                    
                                                                                                                                
Representative  Wilson provided  wrap up  on the  amendment.                                                                    
She indicated her amendment was  not a shot at the governor.                                                                    
There  were more  people  in the  governor's  office in  the                                                                    
budget than  in FY 18. There  was $150,000 in the  budget to                                                                    
compensate  additional  employees.  She was  concerned  with                                                                    
transparency.  She argued  that it  was an  increase to  the                                                                    
budget no matter  how people viewed it.  Her amendment would                                                                    
keep funding at the FY 18 level.                                                                                                
                                                                                                                                
Co-Chair Seaton MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson, Grenn                                                                               
OPPOSED: Guttenberg, Kawasaki, Ortiz, Gara, Foster, Seaton                                                                      
                                                                                                                                
The MOTION to adopt Amendment H GOV 1 FAILED (5/6).                                                                             
                                                                                                                                
1:52:39 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  MOVED to  ADOPT  Amendment  H GOV  2                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Contingency Fund                                                                                                           
     H GOV 2 - 3001: Financial Services                                                                                         
     Offered by Representative Wilson                                                                                           
                                                                                                                                
     FY17 Actuals  were $0 and  the FY19  Governor's request                                                                    
     is $550.0.  A decrement of  $100.0 will result in  a FY                                                                    
     19 budget  request of $400.0  for what is  described as                                                                    
     "agency support  as needed to meet  high priority needs                                                                    
     in the contingency fund"                                                                                                   
                                                                                                                                
Co-Chair Seaton OBJECTED.                                                                                                       
                                                                                                                                
Representative Wilson  read the  amendment (see  above). She                                                                    
remarked that the  contingency fund was worth  more than her                                                                    
house. She  thought at some  point a contingency  fund would                                                                    
change into  a capital request  or another type  of request.                                                                    
She conveyed that  the fund was not used in  the prior year.                                                                    
Her amendment was a slight decrease in the fund amount.                                                                         
                                                                                                                                
Mr.  Henderson  replied that  the  contingency  fund in  the                                                                    
Office of  the Governor had  existed for about 30  years. He                                                                    
detailed that it  had a budget of $800,000 in  FY 14 and had                                                                    
been  reduced   to  $550,000   reflecting  a   reduction  of                                                                    
$250,000.  The contingency  funds  allowed  the governor  to                                                                    
have  flexibility to  access funds  when other  sources were                                                                    
not  available. Historically,  the funds  had been  used for                                                                    
various   sources  including   transition  costs   when  the                                                                    
governor took office  in 2015. The funds had  also been used                                                                    
for  redistricting costs  and gasline  efforts. In  general,                                                                    
the fund was available for shortfalls.                                                                                          
                                                                                                                                
1:55:44 PM                                                                                                                    
                                                                                                                                
Representative  Wilson stated  the  decrement was  $150,000.                                                                    
She surmised  it was a  slush fund. Mr.  Henderson disagreed                                                                    
with Representative Wilson's terminology.                                                                                       
                                                                                                                                
Representative Wilson  thought Mr. Henderson was  saying the                                                                    
fund could be  used for almost anything. She  asked how much                                                                    
the transitional costs were in  2015. Mr. Henderson answered                                                                    
that the cost was  $150,000. Representative Wilson asked how                                                                    
much  the cost  had  been for  redistricting. Mr.  Henderson                                                                    
replied that  it was approximately  $300,000. Representative                                                                    
Wilson asked  about the gasline cost.  Mr. Henderson replied                                                                    
that it was $150,000.                                                                                                           
                                                                                                                                
Representative  Pruitt stated  that  in FY  17  none of  the                                                                    
funds  had   been  used.  He   wondered  if  there   was  an                                                                    
expectation,  outside of  transition costs,  of there  being                                                                    
any redistricting  costs. He asked  if the governor  had any                                                                    
intent  on using  the funds  for  the gasline.  He asked  if                                                                    
there were other  things on the horizon for  which the funds                                                                    
could be  used. Mr. Henderson  replied that he did  not know                                                                    
about how the funding would be  used. He would be advised by                                                                    
the governor or his senior staff.                                                                                               
                                                                                                                                
Representative  Pruitt  thought   the  point  Representative                                                                    
Wilson was trying  to make was that the money  could be used                                                                    
by the governor  in any way he chose. The  hesitation on the                                                                    
legislature's part in  maintaining a $550,00 fund  had to do                                                                    
with  the uncertainty  of how  the money  would be  used. He                                                                    
thought the  amount left in  the account with  the amendment                                                                    
was  a  reasonable  figure.  He   would  be  supporting  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
Vice-Chair Gara  remarked that when Governor  Parnell was in                                                                    
office the amount in the  account was $800,000. At the time,                                                                    
nobody tried to  remove the amount. He thought  there had to                                                                    
be a  separation of powers  and contended that  the governor                                                                    
had been responsible  in not using the fund in  a major way.                                                                    
He thought that  the current governor should  be treated the                                                                    
same as  prior governors. He  did not believe there  was any                                                                    
evidence  that  the  funds  had  been  wasted.  He  did  not                                                                    
understand  why  the  current  governor  was  being  treated                                                                    
differently.                                                                                                                    
                                                                                                                                
2:00:24 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:00:54 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Seaton noted  that the fund was  a contingency fund                                                                    
that lapsed  annually. Historically  the governor's  and the                                                                    
legislature's  budgets had  been left  alone. The  amendment                                                                    
would  take  away the  flexibility  of  funds available  for                                                                    
whatever emergency might arise. He opposed the amendment.                                                                       
                                                                                                                                
Representative  Guttenberg  spoke  about the  separation  of                                                                    
powers.   He  did   not  believe   the  legislature   should                                                                    
micromanage  things at  this level.  He  posed the  question                                                                    
about  whether  legislators'   office  accounts  were  slush                                                                    
funds.  He indicated  that those  funds paid  for day-to-day                                                                    
things.  He  thought it  was  inappropriate  to call  office                                                                    
accounts slush  funds just as  it was inappropriate  to call                                                                    
the contingency fund a slush fund.                                                                                              
                                                                                                                                
Representative  Grenn   appreciated  the   conversation.  He                                                                    
thought it was  a great example of helping  to form opinions                                                                    
and gain context.  He referenced Representative Guttenberg's                                                                    
point  regarding  office accounts.  In  the  prior year  the                                                                    
House  reduced   its  office   accounts  by   a  substantial                                                                    
percentage. I appreciated the current  amendment in the same                                                                    
vein.                                                                                                                           
                                                                                                                                
Representative Tilton pointed to  the difference between the                                                                    
office  account and  the  governor's  contingency fund.  The                                                                    
receipts for the  office accounts had to  go through finance                                                                    
and  fell under  IRS guidelines.  She also  highlighted that                                                                    
office accounts and the  governor's contingency account were                                                                    
similar in that  the accounts were not always  used to their                                                                    
full extent.                                                                                                                    
                                                                                                                                
Representative Wilson  clarified that the account  was being                                                                    
reduced  by $150,00  from $500,000  leaving $400,000  in the                                                                    
account.  She opined  that the  legislature should  have cut                                                                    
Governor  Parnell's $800,000  fund. She  responded to  other                                                                    
concerns such as  a separation of powers.  She stressed that                                                                    
the  funds  contributed  to  the  state's  budget  gap.  She                                                                    
emphasized that the amendment was  not against the governor.                                                                    
She  spoke to  other costs.  She was  concerned about  using                                                                    
$150,000 from the fund for  the gasline. The amendment would                                                                    
leave $100,000  over the  highest amount  in the  past three                                                                    
years.                                                                                                                          
                                                                                                                                
Co-Chair Seaton MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Ortiz,  Pruitt, Thompson,  Tilton, Wilson,  Grenn,                                                                    
Kawasaki                                                                                                                        
OPPOSED: Gara, Guttenberg, Foster, Seaton                                                                                       
                                                                                                                                
The MOTION  PASSED (7/4). There being  NO further OBJECTION,                                                                    
Amendment H GOV 2 was ADOPTED.                                                                                                  
                                                                                                                                
2:07:41 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton MOVED  to ADOPT Amendment H HSS  11 (copy on                                                                    
file):                                                                                                                          
                                                                                                                                
     Behavioral Health                                                                                                          
     Behavioral Health Treatment and Recovery Grants                                                                            
     H HSS 11                                                                                                                   
                                                                                                                                
     Replace Unsustainable Alcohol  and Other Drug Treatment                                                                    
     and Prevention Funds with Recidivism Reduction Funds                                                                       
     Offered by Representative Seaton                                                                                           
                                                                                                                                
     Currently,   and  in   the  past   few  fiscal   years,                                                                    
     appropriations   from  the   Alcohol  and   Other  Drug                                                                    
     Treatment and Prevention Fund  have exceeded revenue to                                                                    
     the fund.  The excess appropriations have  been covered                                                                    
     by a  carry forward  balance. At  current appropriation                                                                    
     levels, the carry forward balance  will be exhausted in                                                                    
     FY20.                                                                                                                      
                                                                                                                                
     Total appropriations  of $24.6 million included  in the                                                                    
     FY19 Governor's  request for  Alcohol Funding  are $3.9                                                                    
     million  more than  the  $20.7  million of  anticipated                                                                    
     FY19 revenues. Because  appropriations from the Alcohol                                                                    
     Fund  have exceeded  current year  revenue since  FY14,                                                                    
     the  carry-forward  balance  in the  Alcohol  Fund  has                                                                    
     declined as follows:                                                                                                       
                                                                                                                                
     FY15: $18.4 million carried forward into FY15                                                                              
     FY19: $6.9 million anticipated carry-forward into FY19                                                                     
     FY20: $2.9  million carried forward  but there  will be                                                                    
     an  estimated  shortfall  of $1  million  in  available                                                                    
     funding.  Another  fund  source   will  be  needed,  or                                                                    
     services will be reduced.                                                                                                  
                                                                                                                                
     The Department  of Revenue projects that  in FY19 there                                                                    
     will  be  $9  million  of  Recidivism  Reduction  Funds                                                                    
     available  for  appropriation.   This  amendment  would                                                                    
     increase the  use of  Recidivism Reductions  funds from                                                                    
     $6  million  to  $7.5  million.  The  budget  for  this                                                                    
     allocation already includes  $1,625.0 of the Recidivism                                                                    
     Fund. With this amendment the total will be $3,125.0.                                                                      
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair Seaton read the amendment (see above).                                                                                 
                                                                                                                                
2:09:54 PM                                                                                                                    
                                                                                                                                
Representative  Wilson asked  Co-Chair  Seaton  to help  her                                                                    
understand  where  the  money for  alcohol  and  other  drug                                                                    
treatments was coming from. She  wondered whether not having                                                                    
enough money was a result  of less alcohol being consumed in                                                                    
Alaska. Co-Chair  Seaton responded that that  there was less                                                                    
carry forward because more money was being spent.                                                                               
                                                                                                                                
Vice-Chair Gara asked  to be a co-sponsor  of the amendment.                                                                    
The issue  came from his  subcommittee which was  brought to                                                                    
the  subcommittee's  attention  by the  Legislative  Finance                                                                    
Division.  He  noted  that  the state  was  taking  less  in                                                                    
alcohol  tax  and  providing   treatment  through  the  fund                                                                    
presently.  The state  would be  spending more  than it  was                                                                    
taking  in FY  20. The  amendment specified  that the  other                                                                    
treatment related  fund, the fund  from which  the marijuana                                                                    
tax  proceeds could  be used,  was the  recidivism reduction                                                                    
fund.  He  conveyed  that both  were  treatment  funds.  The                                                                    
current amendment  would extend the ability  for the alcohol                                                                    
tax  fund to  cover  the state's  treatment  services for  1                                                                    
year. The  amount that could  be used  was equal to  half of                                                                    
the excess proceeds from the  marijuana tax. The funds could                                                                    
be  used for  the Recidivism  Reduction Fund.  The estimated                                                                    
excess  was  projected to  be  about  $3 million.  It  would                                                                    
provide   the   legislature   and  the   administration   an                                                                    
additional year  to come up  with a plan. He  suggested that                                                                    
there was no fiscal impact with the amendment.                                                                                  
                                                                                                                                
Representative   Wilson   wondered   why   the   state   was                                                                    
overspending. She  asked who received the  grants. She asked                                                                    
if certain  criteria were used  to determine if  those going                                                                    
through   treatment  were   completing  it.   She  expressed                                                                    
concerned about using money that  was put away for jails and                                                                    
to help  people get back  on their  feet and keep  them from                                                                    
reoffending.  She  wanted  to   better  understand  who  was                                                                    
receiving the grants.                                                                                                           
                                                                                                                                
Vice-Chair  Gara responded  that  the alcohol  tax fund  was                                                                    
used for both  alcoholism and treatment. He  opined that the                                                                    
state did  not provide enough alcoholism  and drug treatment                                                                    
in Alaska. The  alcohol tax did not cover all  of the costs.                                                                    
Over  the years,  the legislature  had been  appropriating a                                                                    
little  bit more  out  of  the alcohol  tax  and other  drug                                                                    
treatment funds than was being received for alcohol taxes.                                                                      
                                                                                                                                
2:14:24 PM                                                                                                                    
                                                                                                                                
Representative Wilson  asked if  the programs  that received                                                                    
funding  were  working.  She recalled  that  previously  the                                                                    
legislature   had  not   seen  any   statistics  on   people                                                                    
completing  treatment. She  thought that  perhaps the  state                                                                    
was  spending money  on programs  that  were not  successful                                                                    
rather than on other things.                                                                                                    
                                                                                                                                
SHAWNDA  O'BRIEN,  ASSISTANT   COMMISSIONER,  DEPARTMENT  OF                                                                    
HEALTH  AND SOCIAL  SERVICES, thought  Representative Wilson                                                                    
might be confusing  the fund source with  the Alcohol Safety                                                                    
Action  Program, which  was a  different program.  The funds                                                                    
went  towards   supporting  substance  use   prevention  and                                                                    
treatment efforts.  They were different grant  program funds                                                                    
than  the  funds  related  to   the  Alcohol  Safety  Action                                                                    
Program.                                                                                                                        
                                                                                                                                
Representative Wilson  asked if  any of  the grants  went to                                                                    
the treatment  of alcohol  and substance  abuse or  were the                                                                    
grants  used  to prevent  people  from  drinking and  taking                                                                    
drugs. Ms. O'Brien  replied that the grants  went toward the                                                                    
Substance Misuse Treatment and Prevention Program.                                                                              
                                                                                                                                
Representative Wilson  asked for statistics relating  to the                                                                    
grant program successes of people  no longer taking drugs or                                                                    
drinking.  She wondered  what the  percentage  rate was  for                                                                    
every 100 participants  in the program that  no longer drank                                                                    
or  took  drugs.  Ms.  O'Brien  could  follow  up  with  the                                                                    
information.                                                                                                                    
                                                                                                                                
Representative  Wilson  asked  if  there  was  a  connection                                                                    
between the people  being helped in the  program with people                                                                    
just  getting out  of jail.  Ms. O'Brien  answered that  the                                                                    
recidivism  reduction  funds  were not  comingled  with  the                                                                    
funds being  discussed. They were  set aside for  a separate                                                                    
program and  served a different  purpose. The  amendment was                                                                    
requesting was to  be able to co-mingle the  fund sources in                                                                    
order  to  extend  the  existing   services  the  state  was                                                                    
providing beyond the what the funding currently allowed.                                                                        
                                                                                                                                
Representative  Wilson wondered,  with  recidivism being  as                                                                    
high as it was, whether  individuals that could be using the                                                                    
recidivism  funds were  participating  in any  of the  grant                                                                    
programs currently available.                                                                                                   
                                                                                                                                
Ms. O'Brien responded that the  state's population was being                                                                    
served by the different types  of funding in different areas                                                                    
of the  budget. She reported  that it was possible  that the                                                                    
populations being served by  the Substance Misuse, Treatment                                                                    
and Prevention Program and  the Recidivism Reduction Program                                                                    
were similar  or would potentially cross  over. Folks coming                                                                    
out of  prison would  likely be  participating in  more than                                                                    
one of  the state's program areas.  The Recidivism Reduction                                                                    
Funds were  currently being  administered by  the department                                                                    
under  SB 91  [Legislation  passed in  2016  - Short  Title:                                                                    
Omnibus Crim  Law and Procedure; Corrections]  efforts. They                                                                    
were different  initiatives than  what this  particular fund                                                                    
source had been used for.  She guessed the populations being                                                                    
served in both  areas were very similar or  that there would                                                                    
be some crossover.                                                                                                              
                                                                                                                                
2:19:15 PM                                                                                                                    
                                                                                                                                
Representative Wilson stressed  the state's major recidivism                                                                    
problem. She  found it  hard to believe  there would  be any                                                                    
funds left  over when 2 or  3 offenders got out  of jail and                                                                    
reoffended.  She was  concerned  about not  knowing who  the                                                                    
funds  were   going  to  and   whether  the   programs  were                                                                    
successful. Her larger concern had  to do with utilizing the                                                                    
funds for  anything other than  what they were  intended for                                                                    
in SB 91;  treatment. She was  aware that the  Department of                                                                    
Corrections  (DOC) was  putting together  more programs  for                                                                    
recidivism.                                                                                                                     
                                                                                                                                
Vice-Chair Gara commented that it  was up to legislators and                                                                    
the department to  figure out how to  reduce recidivism. The                                                                    
bulk of  the recidivism  reduction funds were  going through                                                                    
DOC  and to  people  who had  been  released. The  requested                                                                    
budget  of the  $9 million  expected  from the  fund was  $6                                                                    
million. He  concluded that no  money the  amendment touched                                                                    
would impact  what was  proposed by  the legislature  or the                                                                    
governor's  office for  recidivism reduction.  He would  not                                                                    
support the  amendment if  money was  being taken  away from                                                                    
recidivism  reduction   efforts.  Currently,  there   was  a                                                                    
projected $3 million excess for the coming year.                                                                                
                                                                                                                                
Representative Pruitt  wanted to  make sure  the legislature                                                                    
did not  do the same thing  to the recidivism fund  that had                                                                    
been done  to the  alcohol fund.  He believed  the amendment                                                                    
was temporary  and resulted in  a fund change. He  asked how                                                                    
to ensure that  as the need for  recidivism funds increased,                                                                    
less money would go into  the alcohol fund. He was concerned                                                                    
about  the long-term  sustainability of  both funds  and the                                                                    
potential  difficulties  that  might  arise  in  the  budget                                                                    
process going forward.                                                                                                          
                                                                                                                                
2:22:44 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  asked to hear from  the Legislative Finance                                                                    
Division.                                                                                                                       
                                                                                                                                
LACEY  SANDERS,   ANALYST,  LEGISLATIVE   FINANCE  DIVISION,                                                                    
addressed  Representative Pruitt's  comments about  ensuring                                                                    
the legislature  did not overspend the  recidivism reduction                                                                    
fund. She reported  that in FY 19 there was  projected to be                                                                    
$9 million  in the recidivism reduction  fund. The amendment                                                                    
increased  the spending  which in  FY 18  was $6  million to                                                                    
$1.75 million. The  proposed number was utilized  so that if                                                                    
revenue did not  come in as projected, there would  not be a                                                                    
shortfall in the ability to issue grants.                                                                                       
                                                                                                                                
Representative  Pruitt  asked  Ms.  Sanders  to  repeat  her                                                                    
answer.  Ms.  Lacey  responded  that  in  FY  19  there  was                                                                    
projected  to  be  $9 million  of  revenue  from  recidivism                                                                    
reduction  funds.  The  current  budget had  $6  million  of                                                                    
spending.  The  amendment  would add  another  $1.5  million                                                                    
bringing the total  to $7.5 million. In other  words, all of                                                                    
the projected revenue would not be fully expended.                                                                              
                                                                                                                                
Representative  Pruitt referred  to the  alcohol fund  which                                                                    
had additional  funds in  the account  and had  been reduced                                                                    
over time.  He did not  necessarily see additional  money in                                                                    
the  recidivism fund.  It  sounded like  there  would be  an                                                                    
extra  $1.5 million  that  could be  carried  over into  the                                                                    
future year.  He believed there  would be a greater  need to                                                                    
utilize the  recidivism fund going  forward. He  spoke about                                                                    
the demand on the fund in future years.                                                                                         
                                                                                                                                
Ms. Sanders  did not  have the ability  to project  what the                                                                    
demand on the  fund would be. She thought  the Department of                                                                    
Health and  Social Services (DHSS)  might be able  to define                                                                    
the demand. The Legislative  Finance Division (LFD) used the                                                                    
Department of  Revenue (DOR) for its  source of projections.                                                                    
There  was   a  substantial  increase  in   revenue  as  the                                                                    
marijuana  tax built  up. She  reported that  in FY  18 $4.6                                                                    
million  of   revenue  was   projected  in   the  recidivism                                                                    
reduction fund. Revenues were anticipated  to increase to to                                                                    
$9  million  in  FY  19, a  substantial  increase.  She  was                                                                    
uncertain where  things would level out.  Revenue would have                                                                    
to be  watched yearly until  a stable source of  revenue was                                                                    
determined.                                                                                                                     
                                                                                                                                
2:26:23 PM                                                                                                                    
                                                                                                                                
Representative  Pruitt  did not  want  to  be faced  with  a                                                                    
similar  challenge for  the recidivism  reduction fund  that                                                                    
the legislature had faced with the alcohol fund.                                                                                
                                                                                                                                
Representative  Guttenberg relayed  a story  about a  parent                                                                    
talking  to  him about  all  of  the  money going  into  the                                                                    
recidivism fund  to keep people  out of a cycle.  The parent                                                                    
told  of   their  child   approaching  them   about  needing                                                                    
treatment  for   either  drug   or  alcohol   addiction.  He                                                                    
indicated  that when  a person  admitted  they needed  help,                                                                    
they  had a  higher chance  of success.  The parent  was not                                                                    
able  to get  their child  into  a treatment  program for  a                                                                    
significant amount  of time. The  child was sent  outside in                                                                    
search of treatment. He  understood recidivism was important                                                                    
but noted  that preventing a  person from their  first crime                                                                    
was equally important.                                                                                                          
                                                                                                                                
Co-Chair  Seaton  provided  wrap  up on  the  amendment.  He                                                                    
relayed  that the  amendment  would only  take  half of  the                                                                    
excess  funds. The  fund was  growing with  the increase  of                                                                    
marijuana taxes.  He did not  believe marijuana  taxes would                                                                    
be reduced  in the near  future. He asked members  for their                                                                    
support of the amendment.                                                                                                       
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt,   Thompson,   Gara,   Grenn,   Guttenberg,                                                                    
Kawasaki, Ortiz, Seaton, Foster                                                                                                 
OPPOSED: Tilton, Wilson                                                                                                         
                                                                                                                                
The MOTION  PASSED (9/2). There being  NO further OBJECTION,                                                                    
Amendment H HSS 11 was ADOPTED.                                                                                                 
                                                                                                                                
2:29:15 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:51:17 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Tilton MOVED  to  ADOPT Amendment  H HSS  12                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Behavioral Health                                                                                                          
     Behavioral Health Administration                                                                                           
     H HSS 12                                                                                                                   
     Travel and Commodities Reduction Based on FY17 Actual                                                                      
     Levels Plus Adjustment for CPI                                                                                             
     Offered by Representative Tilton                                                                                           
                                                                                                                                
     Decrement to Travel and Commodities from 2017 Actual                                                                       
     Levels plus adjustment for CPI                                                                                             
                                                                                                                                
Vice-Chair Gara OBJECTED for discussion.                                                                                        
                                                                                                                                
Representative Tilton  read the  amendment (see  above). The                                                                    
reduction  would  total  $100,000.  She  conveyed  that  the                                                                    
travel  under the  travel line  was for  out-of-state travel                                                                    
which had doubled.                                                                                                              
                                                                                                                                
Vice-Chair Gara  stated that the  section of  the department                                                                    
had been  very efficient.  There were more  people receiving                                                                    
behavioral health  services than  ever before and  there was                                                                    
no end  in sight. The  department's budget had  been reduced                                                                    
by  $19   million  in  recent  years.   The  department  had                                                                    
leveraged more  federal funds than  the legislature  had cut                                                                    
to  try  to  address  the  growing  need  for  services.  He                                                                    
continued that  in terms of  administration, the  budget had                                                                    
been flat  even though  the administration was  serving more                                                                    
and  more people.  The  administration  budget was  $107,000                                                                    
less than  it was in  FY 17.  Travel was used  in behavioral                                                                    
health to  visit grantees to  make sure they  were complying                                                                    
with the law, for training,  and for grantees to do Medicaid                                                                    
billing.  It  was  also  used   by  regional  and  community                                                                    
providers to  help with grants  and billing. It was  used to                                                                    
supervise  staff around  the state.  The  division had  been                                                                    
trying  to serve  a growing  number of  people at  a reduced                                                                    
cost.                                                                                                                           
                                                                                                                                
2:54:08 PM                                                                                                                    
                                                                                                                                
Representative  Wilson asked  how the  travel and  commodity                                                                    
part  had  been  impacted.  She   would  be  supporting  the                                                                    
amendment. Representative Tilton  relayed that the amendment                                                                    
would impact  the travel line,  but it was  the out-of-state                                                                    
travel that had  more than doubled. She asked  if there were                                                                    
situations  were the  department was  traveling out-of-state                                                                    
to check on beneficiaries.                                                                                                      
                                                                                                                                
Vice-Chair Gara answered that  the out-of-state travel costs                                                                    
were a fraction of the  item. The grantees were obviously in                                                                    
the state. The  amendment would reduce the  travel budget by                                                                    
13 percent  and the commodities  budget by 26 percent  for a                                                                    
division serving a growing number of people.                                                                                    
                                                                                                                                
Representative  Tilton commented  that  the amendment  would                                                                    
reduce  travel. The  outside travel  had  more than  doubled                                                                    
over  the previous  year. The  amendment reflected  actuals.                                                                    
However, she  used final costs rather  than actuals. Actuals                                                                    
would have  been 3 times  more that  the final costs  in the                                                                    
reduction. She asked for support of the amendment.                                                                              
                                                                                                                                
Vice-Chair Gara MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Thompson, Tilton, Wilson, Pruitt                                                                                      
OPPOSED: Gara,  Grenn, Guttenberg, Kawasaki,  Ortiz, Foster,                                                                    
Seaton                                                                                                                          
                                                                                                                                
The MOTION to adopt Amendment H HSS 12 FAILED (4/7).                                                                            
                                                                                                                                
2:56:24 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara  requested to consider  Amendments H  HSS 13                                                                    
and H HSS 24 simultaneously. He  explained that H HSS 13 and                                                                    
H HSS  24 were Alaska  Psychiatric Institute  (API) related.                                                                    
He explained that in the mid-2000s  API was supposed to be a                                                                    
140-bed facility with about 30  beds for criminal (forensic)                                                                    
patients.  Instead  it  was  an   80-bed  facility  with  10                                                                    
forensic beds.  He reported that  of those 80 beds  about 10                                                                    
to  15  beds  were  under  reconstruction  to  meet  federal                                                                    
standards.  He opined  that  Alaska was  at  a crisis  level                                                                    
treating  its  psychiatric   patients.  Currently  about  30                                                                    
percent   of   the  patients   that   left   API  after   an                                                                    
unjustifiable  waiting  list were  back  at  API within  180                                                                    
days.                                                                                                                           
                                                                                                                                
Co-Chair   Seaton  aske   Vice-Chair   Gara   to  move   the                                                                    
amendments.                                                                                                                     
                                                                                                                                
Vice-Chair Gara  MOVED to  ADOPT Amendments H  HSS 13  and H                                                                    
HSS 24 (copy on file):                                                                                                          
                                                                                                                                
H HSS 13:                                                                                                                       
                                                                                                                                
     Behavioral Health                                                                                                          
     Behavioral Health Administration                                                                                           
     H HSS 13                                                                                                                   
     One-time  Funding  for   Study  on  Improving  Alaska's                                                                    
     Capacity to  Treat Defendants with Acute  Mental Health                                                                    
     Needs                                                                                                                      
     Offered by Representative Gara                                                                                             
                                                                                                                                
     Funding will  be used to  examine Alaska's  capacity to                                                                    
     provide forensic  mental health services,  including an                                                                    
     assessment  of   population  needs,  and   options  for                                                                    
     improving and expanding those services.                                                                                    
                                                                                                                                
     Unlike most  states, Alaska does not  have a "forensic"                                                                    
     hospital,  although  it  does  have  a  10-bed  "medium                                                                    
     security"  forensic  unit  located  within  the  Alaska                                                                    
     Psychiatric Institute (API).                                                                                               
                                                                                                                                
     The study being  requested is part of an  effort to see                                                                    
     if  patients  served  by  API  can  be  served  better.                                                                    
     Studies  culminating  in  2005  recommended  a  140-bed                                                                    
     facility at  API, including 40 forensic  beds; however,                                                                    
     API  was built  with a  capacity for  80 patients,  and                                                                    
     only 10 forensic beds.                                                                                                     
                                                                                                                                
     Moving  API's  current  10  forensic  beds  to  another                                                                    
     location  would  free-up  beds   inside  API  that  are                                                                    
     desperately needed to address  the waiting lists at API                                                                    
     for  court-ordered   adult  acute   civil,  involuntary                                                                    
     admissions.  Due  to  the  lack  of  beds,  almost  all                                                                    
     patients  are  being   held  in  emergency  departments                                                                    
     around the state awaiting transfer.                                                                                        
                                                                                                                                
     Forensic   services   are    mental   health   services                                                                    
     specifically  provided to  justice-involved individuals                                                                    
     (defendants). One  of the  more common  forensic issues                                                                    
     facing courts  is whether a criminal  defendant has the                                                                    
     mental  capacity   to  participate  in   his/her  legal                                                                    
     proceedings   and  whether   the  individual   has  the                                                                    
     capacity to exercise  his liberty to pursue  his or her                                                                    
     interests during the trial.                                                                                                
                                                                                                                                
     Populations  who  could  be  served  by  mental  health                                                                    
     services provided in a forensic hospital include:                                                                          
      --   Pre-trial   detainees    held   in   correctional                                                                    
     facilities  who   need  competency  (to   stand  trial)                                                                    
     evaluations by API psychologists;                                                                                          
      --  Defendants found  incompetent to  stand trial  and                                                                    
     referred to API's forensic                                                                                                 
     unit for "restoration to competency"  in order to stand                                                                    
     trial;                                                                                                                     
      --  Persons  found  incompetent to  proceed  to  trial                                                                    
     (known as  "non-restorable" to competency)  and civilly                                                                    
     committed to  API for treatment,  as well  as seriously                                                                    
     mentally ill  persons who are  violent or  convicted of                                                                    
     sex   offenses   whose   difficult   behaviors   create                                                                    
    significant community discharge placement options.                                                                          
      --  Inmates sentenced  to  correctional facilities  in                                                                    
     need  of inpatient  psychiatric  care, including  those                                                                    
     who are found Guilty but Mentally Ill                                                                                      
                                                                                                                                
     This  proposed  feasibility  study  will  estimate  the                                                                    
     potential number of forensic  beds needed to adequately                                                                    
     address these various, complex populations.                                                                                
                                                                                                                                
     The  study  would  be multifaceted  in  that  it  would                                                                    
     involve the  following considerations:  populations and                                                                    
     potential  numbers  of  persons   to  be  served  in  a                                                                    
     forensic  hospital;  possible locations  in  Anchorage;                                                                    
     accreditation  concerns  arising from  the  relocation;                                                                    
     staffing issues; transportation needs;  the cost of any                                                                    
     identified   facilities;  and   the  retrofitting   and                                                                    
     operating    cost   comparisons    between   identified                                                                    
     potential  locations and  facilities. If  this proposal                                                                    
     is not funded the demands  on API will continue and the                                                                    
     "boarding"   of   psychiatric  patients   in   hospital                                                                    
     emergency departments across the State will continue.                                                                      
                                                                                                                                
H HSS 24:                                                                                                                       
                                                                                                                                
     Medicaid Services                                                                                                          
     Behavioral Health Medicaid Services                                                                                        
     H HSS 24                                                                                                                   
     Transfer MHTAAR to Behavioral                                                                                              
     Health  for   Study  to   Improve  Capacity   to  Treat                                                                    
     Defendants with Acute MH Needs                                                                                             
     Offered by Representative Gara                                                                                             
                                                                                                                                
     The Mental  Health Trust  has expressed  verbal support                                                                    
     for this  study and  movement of  these funds  from the                                                                    
     Medicaid   Services   appropriation/Behavioral   Health                                                                    
     allocation      to      the      Behavioral      Health                                                                    
     appropriation/Behavioral      Health     Administration                                                                    
     allocation.  Board  approval   is  anticipated  at  the                                                                    
     Mental Health Trust's next meeting in May 2018.                                                                            
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Vice-Chair Gara continued that the  amendment was part of an                                                                    
effort to  address the underserved population  - people with                                                                    
acute  mental  illness  who were  potentially  dangerous  to                                                                    
themselves or the  public. He reported having  spoken to the                                                                    
Alaska Mental Health  Trust who was going  to match $159,000                                                                    
with  $159,000 of  state money  for a  feasibility study  to                                                                    
find another  location for forensic  patients. The  idea was                                                                    
to free  up space at API  to avoid API becoming  a revolving                                                                    
door  for  patients.  He  hoped   more  treatment  would  be                                                                    
available  to patients,  and patients  would be  more stable                                                                    
when they came out. He continued  that the CEO of the Mental                                                                    
Health  Trust was  confident that  the  board would  approve                                                                    
their share  of $159,000,  however, the  board did  not meet                                                                    
until April. He  elaborated that H HSS 24  moved the funding                                                                    
to the  correct allocation  from Behavioral  Health Medicaid                                                                    
to Behavioral Health Administration.                                                                                            
                                                                                                                                
2:59:26 PM                                                                                                                    
                                                                                                                                
Representative  Grenn  talked  with  a  woman  the  previous                                                                    
weekend who worked  at API. She had a colleague  who had her                                                                    
arm   broken  by   a  violent   mentally  ill   person.  The                                                                    
representative  had  a  great conversation  with  the  woman                                                                    
about what was  going on at API and the  passion she had for                                                                    
patients.  He thought  the work  done by  the representative                                                                    
from  downtown  Anchorage  was   commendable.  He  would  be                                                                    
supportive of the amendment.                                                                                                    
                                                                                                                                
Representative Kawasaki  referred to Amendment H  HSS 13. He                                                                    
asked if  patients remanded by  the courts to serve  and who                                                                    
were serving  at API  were eligible  for Medicaid.  He noted                                                                    
that  he   served  on  the  DOC   budget  subcommittee  with                                                                    
Representative Wilson. They  had discussed sending prisoners                                                                    
with  the costliest  medical expenses  to facilities  in the                                                                    
Lower 48  where healthcare  could be  provided at  a cheaper                                                                    
rate.  He  wondered  if  there  was  potential  savings  for                                                                    
incarcerated  individuals staying  at  API to  be housed  in                                                                    
facilities outside of Alaska.                                                                                                   
                                                                                                                                
Vice-Chair  Gara  answered  that  Medicaid  Disproportionate                                                                    
Shared Hospital (DSH) payments were  a form of Medicaid used                                                                    
by  the incarcerated  patient  population  - Medicaid  match                                                                    
funding.  He furthered  that  the  courts referred  forensic                                                                    
patients to API.  He reported that API had no  choice but to                                                                    
accept them, which  decreased the number of  beds for people                                                                    
who had  committed no crimes but  had psychiatric illnesses.                                                                    
He had not analyzed whether to  send people out of state. He                                                                    
did  not have  information from  the department.  He relayed                                                                    
that  the  department  had  a  study  on  the  street  about                                                                    
expanding API to  avoid waiting lists and  to provide needed                                                                    
continuity  of   care.  He  would  want   certain  questions                                                                    
answered before  implementing a  policy of  sending patients                                                                    
out of state without family support.                                                                                            
                                                                                                                                
Representative Wilson did not  believe the question had been                                                                    
answered.  She  wondered  whether Medicaid  expansion  would                                                                    
cover  prisoners. She  wondered  if they  would be  eligible                                                                    
because API  was a state facility.  Vice-Chair Gara deferred                                                                    
to the department.                                                                                                              
                                                                                                                                
JON SHERWOOD, DEPUTY COMMISSIONER,  DEPARTMENT OF HEALTH AND                                                                    
SOCIAL SERVICES,  responded there was a  federal prohibition                                                                    
for  regular Medicaid  to pay  for services  in institutions                                                                    
for mental disease  for individuals age 21 thru  64. Most of                                                                    
the  corrections  population  would   not  be  eligible  for                                                                    
treatment in  a psychiatric  institute, state  or otherwise,                                                                    
thru Medicaid. The expansion  population, if in correctional                                                                    
custody  were   not  eligible   for  Medicaid   unless  they                                                                    
overnighted  in  an  inpatient  facility.  However,  because                                                                    
Medicaid did  not cover institutions for  mental disease for                                                                    
ages 21 thru 64 there would be no Medicaid coverage.                                                                            
                                                                                                                                
3:04:47 PM                                                                                                                    
                                                                                                                                
Representative   Wilson   appreciated   the   commissioner's                                                                    
explanation. She thought the amendment  was about a study to                                                                    
see if  there was another  facility that could  be utilized.                                                                    
She  asked for  additional detail  about the  study and  its                                                                    
purpose.  She  mentioned  retrofitting  and  operating  cost                                                                    
comparisons  between  identified  potential  locations.  She                                                                    
wondered if  the state was  looking to lease or  buy another                                                                    
facility. She asked for more specifics regarding expansion.                                                                     
                                                                                                                                
Vice-Chair Gara answered that the  study would be contracted                                                                    
out  to  find  the   most  appropriate  place  for  forensic                                                                    
patients. He  thought the location  would have to  be within                                                                    
Alaska.   The  facility   could   be  a   privately-operated                                                                    
institution.  The study  was to  determine the  best way  to                                                                    
serve  the  specific  forensic  patient  population.  Unlike                                                                    
Alaska, most states had a  separate forensic unit for people                                                                    
coming  through  the  criminal  system.  He  indicated  that                                                                    
Alaska put  people who went  through the criminal  system in                                                                    
the same place  as other API patients. The  practice was not                                                                    
ideal, especially  because there  was already a  shortage of                                                                    
treatment rooms for API patients without criminal records.                                                                      
                                                                                                                                
Representative  Wilson   asked  how   the  study   would  be                                                                    
different   than  the   study   currently  being   conducted                                                                    
regarding API.                                                                                                                  
                                                                                                                                
Vice-Chair Gara  answered that the  study on the  street did                                                                    
not pertain  to the  forensic population. Rather,  it looked                                                                    
at  expanding API.  The study  would consider  what capacity                                                                    
was  needed  at API  to  avoid  people  having  to be  on  a                                                                    
waitlist or having  to go to hospital  emergency rooms until                                                                    
being  admitted to  API. Many  people were  kept for  a very                                                                    
short time  at API because  of the  number of people  on the                                                                    
waitlist. Patients  were discharged, but  typically returned                                                                    
to  API  within 180  days.  The  study would  determine  the                                                                    
proper size  of API. He  reported that in the  mid-2000s the                                                                    
study showed the need for a 140-bed facility.                                                                                   
                                                                                                                                
Representative  Wilson  asked  if an  expansion  could  also                                                                    
include  more  forensic  space. She  thought  the  expansion                                                                    
portion could  overlap based on  what the  amendment stated.                                                                    
Vice-Chair  Gara clarified  that  the amendment  was not  to                                                                    
fund  patients  but  to find  an  appropriate  location  for                                                                    
forensic patients  separate from API.  The idea was  to free                                                                    
up  space at  API  for non-criminal  patients  in need.  The                                                                    
current study did not address the issue.                                                                                        
                                                                                                                                
3:08:43 PM                                                                                                                    
                                                                                                                                
Representative  Tilton  asked   whether  patients  who  were                                                                    
unable to  get into  API and who  were sitting  in hospitals                                                                    
covered  by DSH  funds would  be covered  by DSH  funds. Mr.                                                                    
Sherwood answered that a number  of people who could not get                                                                    
into API were people who  needed to be evaluated or restored                                                                    
to competency for  trial. They would be sitting  in jails if                                                                    
they did not get into API  while they waited to be evaluated                                                                    
or  treated  for  competency.   They  composed  the  primary                                                                    
population served by forensic beds.                                                                                             
                                                                                                                                
Vice-Chair  Gara  indicated  that   he  had  tried  to  find                                                                    
matching funds  to reduce  the state's costs  on all  of the                                                                    
API  amendments. He  suggested that  if the  legislature did                                                                    
not  do  something,  someone  would  get  hurt  or  die.  He                                                                    
appreciated  the  CEO  of the  Alaska  Mental  Health  Trust                                                                    
stating that he would advocate for the matching funds.                                                                          
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara,   Grenn,    Guttenberg,   Kawasaki,   Ortiz,                                                                    
Thompson, Seaton, Foster                                                                                                        
OPPOSED: Tilton, Wilson, Pruitt                                                                                                 
                                                                                                                                
The MOTION PASSED (8/3). There being NO further OBJECTION,                                                                      
Amendments H HSS 13 and H HSS 24 were ADOPTED.                                                                                  
                                                                                                                                
3:10:58 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara MOVED to ADOPT Amendment H HSS 14 (copy on                                                                      
file):                                                                                                                          
                                                                                                                                
     Behavioral Health                                                                                                          
     Behavioral Health Administration                                                                                           
     H HSS 14                                                                                                                   
     Annual  Reports  to  Legislature   on  Use  of  Federal                                                                    
     Disproportionate Share Hospital Funds                                                                                      
     Offered by Representatives: Gara, Tilton                                                                                   
                                                                                                                                
     Wordage:                                                                                                                   
     It  is   the  intent   of  the  legislature   that  the                                                                    
     Department  of  Health  and Social  Services  submit  a                                                                    
     report to  the co-chairs of the  Finance Committees and                                                                    
     Legislative Finance  Division by  November 15  of 2019,                                                                    
     2020 and  2021 on  1) disbursement  and use  of federal                                                                    
     Disproportionate  Share   Hospital  (DSH)   dollars  by                                                                    
     community and regional hospitals,  2) the annual amount                                                                    
     of federal DSH  funds which the state  is not claiming,                                                                    
     and  3) future  strategies  for  claiming those  funds,                                                                    
     including the  possibility of hospitals  matching those                                                                    
     funds, to improve outcomes  for patients, providers and                                                                    
     the public.                                                                                                                
                                                                                                                                
     Explanation:                                                                                                               
     Disproportionate   Share  Hospital   (DSH)  funds   are                                                                    
     provided to state and community  hospitals that serve a                                                                    
     significantly  disproportionate  number  of  low-income                                                                    
     patients  and receive  payments  from  the Centers  for                                                                    
     Medicaid and  Medicare Services to  cover the  costs of                                                                    
     providing care to uninsured  patients. In recent years,                                                                    
     Alaska has not claimed  roughly $10 million annually in                                                                    
     DSH funds  it is  eligible for,  yet many  hospitals in                                                                    
     Alaska  critically need  funds  to  deal with  overflow                                                                    
     from the  Alaska Psychiatric  Institute and  meet other                                                                    
     needs. This  on Use  of Federal  Disproportionate Share                                                                    
     Hospital Funds (continued)  language states legislative                                                                    
     intent that  the Department report annually  on its use                                                                    
     of those  funds, on  the amount  of funds  not claimed,                                                                    
     and steps  it is exploring to  ensure Alaskan hospitals                                                                    
     benefit to the maximum extent possible.                                                                                    
                                                                                                                                
Representative Guttenberg OBJECTED for discussion.                                                                              
                                                                                                                                
Representative Tilton explained the  amendment was in regard                                                                    
to  the Disproportionate  Share  Hospital  (DSH) funds  that                                                                    
were  discussed  earlier  in   the  meeting.  The  amendment                                                                    
advocated for  intent language that would  require a report.                                                                    
She  read  a  portion  of the  amendment  (see  above).  She                                                                    
indicated that  having some data and  information would help                                                                    
the  legislature to  know regionally  where  the funds  were                                                                    
going and  what the need  was. There were DSH  funds sitting                                                                    
available.  She asked  what the  legislature's  plan was  to                                                                    
maximize the usage of those funds.                                                                                              
                                                                                                                                
Representative Wilson  began asking  a question  regarding a                                                                    
different  amendment. Representative  Tilton clarified  that                                                                    
the  amendment  was   a  request  for  a   report  from  the                                                                    
department regarding the usage of DSH funds.                                                                                    
                                                                                                                                
Representative   Wilson  asked   Representative  Tilton   to                                                                    
explain  DSH  funds.   Representative  Tilton  replied  that                                                                    
Disproportionate Share Hospital  funds were federal matching                                                                    
dollars for uncompensated care.                                                                                                 
                                                                                                                                
Vice-Chair  Gara stated  there  was roughly  $10 million  in                                                                    
federal DSH funds available that  the state could match on a                                                                    
50/50 basis.  However, the state  did not have  the matching                                                                    
funds presently. The current  circumstance was that patients                                                                    
needing  care  at  a  facility  like  API  were  sitting  in                                                                    
emergency rooms  while waiting  for space  at a  facility to                                                                    
become available. In some cases,  the patients were violent.                                                                    
The amendment would help monitor  and determine the best use                                                                    
of DSH  funds and the  best way  to leverage what  the state                                                                    
could  not   afford  to   leverage  presently.   He  thought                                                                    
Representative Tilton had  a good idea to ask  for an annual                                                                    
report on the use of DSH funds.                                                                                                 
                                                                                                                                
Representative Guttenberg WITHDREW his OBJECTION.                                                                               
                                                                                                                                
There being NO further OBJECTION, Amendment H HSS 14 was                                                                        
ADOPTED.                                                                                                                        
                                                                                                                                
3:15:10 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara requested simultaneous consideration of                                                                         
Amendments L H HSS 15, H HSS 16, H HSS 25, H HSS 26.                                                                            
                                                                                                                                
Vice-Chair Gara MOVED to ADOPT Amendments L H HSS 15, H HSS                                                                     
16, H HSS 25, H HSS 26 (copy on file):                                                                                          
                                                                                                                                
L H HSS 15:                                                                                                                     
                                                                                                                                
     Behavioral Health                                                                                                          
     Designated Evaluation and Treatment                                                                                        
     L H HSS 15                                                                                                                 
     3-Year State  Matching Funds Totaling $10.5  Million to                                                                    
    Support Hospital-Based Mental Health Care (FY19-21)                                                                         
     Offered by Representatives: Gara, Seaton                                                                                   
     30-GH2564/O.24                                                                                                             
                                                                                                                                
     In  recent years,  Alaska has  not claimed  all of  the                                                                    
     federal Disproportionate  Share Hospital  (DSH) funding                                                                    
     to  which it  is entitled  due  to a  lack of  matching                                                                    
     funds and federal receipt  authority. With a commitment                                                                    
     of  $10.5   million  in  Alaska   Comprehensive  Health                                                                    
     Insurance (ACHI)  funds in FY2019,  the State  would be                                                                    
     able  to  leverage  an   additional  $10.5  million  of                                                                    
     federal DSH funds between FY19 and FY21.                                                                                   
                                                                                                                                
     Currently,  there   is  a  major  gap   in  the  Alaska                                                                    
     Psychiatric   Institute's   (API)  ability   to   admit                                                                    
     patients,  due  to its  limited  capacity  of 80  beds.                                                                    
     Although  API is  claiming all  of the  DSH funding  to                                                                    
     which   it,  as   Alaska's   only  public   psychiatric                                                                    
     hospital, is currently entitled,  the State could claim                                                                    
     a  portion of  its unused  DSH funds  to support  other                                                                    
     hospitals  and  community  behavioral  health  programs                                                                    
     that are  especially impacted by the  lack of treatment                                                                    
     beds at API.                                                                                                               
                                                                                                                                
     Specifically, these additional  funds would enhance the                                                                    
     capacities  of the  State's  three existing  DSH-funded                                                                    
     hospital-based  mental  health treatment  programs  and                                                                    
     provide  new financial  support to  approximately three                                                                    
     other hospitals impacted by the  lack of treatment beds                                                                    
     at API.                                                                                                                    
                                                                                                                                
     These hospitals  have been working hard  to provide and                                                                    
     maintain safe environments for  patients who are court-                                                                    
     ordered to psychiatric evaluation  and treatment at API                                                                    
     (or  one of  the  other two  Designated Evaluation  and                                                                    
     Treatment hospitals). Many of  these patients are being                                                                    
     held for days and  sometimes longer in their hospitals'                                                                    
     emergency departments awaiting transfer to API.                                                                            
                                                                                                                                
     Services  provided would  depend on  what the  hospital                                                                    
     and,  in some  cases,  the  local community  behavioral                                                                    
     health  center  determines  makes the  most  sense  for                                                                    
     their   hospital/community,   ranging  from   physician                                                                    
     (including  psychiatric)  and   social  work  services,                                                                    
     additional security guards and  substance use or mental                                                                    
     health   services    (assessments,   evaluations),   to                                                                    
     discharge  planning and  converting emergency  rooms to                                                                    
     safe  rooms, etc.,  all geared  towards providing  more                                                                    
     appropriate   services  for   the   mentally  ill   and                                                                    
     relieving  the   stress  and  pressures   on  emergency                                                                    
     departments.                                                                                                               
                                                                                                                                
     While  two  other   existing  hospitals  have  approved                                                                    
     Certificates  of Need  to  expand  services to  provide                                                                    
     treatment  for   people  who  would  qualify   for  API                                                                    
     admission, these new services  will not be online until                                                                    
     early   2019  and   2020,   and   ultimately  are   not                                                                    
     anticipated  to meet  the existing  need. Further,  the                                                                    
     Department of Health and  Social Services has submitted                                                                    
     the  Section  1115  Behavioral Health  Medicaid  Waiver                                                                    
     application to  the Centers  for Medicare  and Medicaid                                                                    
     Services  (CMS)  which  will help  increase  access  to                                                                    
     community-based  behavioral  health  services.  Service                                                                    
     implementation  will take  multiple years  and although                                                                    
     it is  anticipated to begin  in 2020, it will  be based                                                                    
     on negotiations with and approval by CMS.                                                                                  
                                                                                                                                
     This  enhanced DSH  funding would  enable the  State to                                                                    
     help address a demonstrated  crisis in the provision of                                                                    
     adequate  and   appropriate  hospital-level   care  for                                                                    
     Alaskans experiencing  a mental health  crisis. Without                                                                    
     additional   resources  there   will  continue   to  be                                                                    
     expensive uncompensated care  at medical facilities for                                                                    
     patients they hold, waiting for API admission.                                                                             
                                                                                                                                
H HSS 16:                                                                                                                       
                                                                                                                                
     Behavioral Health                                                                                                          
     Designated Evaluation and Treatment                                                                                        
     H HSS 16 - Reverse IncT for ACHI Funding                                                                                   
     Request Is Included in Language Section                                                                                    
     Offered by Representative Gara                                                                                             
                                                                                                                                
     Funding is being requested  as a multi-year (FY19-FY21)                                                                    
     language  item  and should  not  be  duplicated in  the                                                                    
     numbers section.                                                                                                           
                                                                                                                                
H HSS 25:                                                                                                                       
                                                                                                                                
     Medicaid Services                                                                                                          
     Health Care Medicaid Services                                                                                              
     H HSS 25                                                                                                                   
     Reverse  IncT for  Federal  to Match  GF  - Request  is                                                                    
     Included in Language Section                                                                                               
     Offered by Representative Gara                                                                                             
                                                                                                                                
     Funding is being requested  as a multi-year (FY19-FY21)                                                                    
     language  item  and should  not  be  duplicated in  the                                                                    
     numbers section.                                                                                                           
                                                                                                                                
H HSS 26:                                                                                                                       
                                                                                                                                
     Medicaid Services                                                                                                          
     Health Care Medicaid Services                                                                                              
     L H  HSS 26  - 3-Year  Federal Matching  Funds Totaling                                                                    
     $10.5 Million  to Support Hospital-Based  Mental Health                                                                    
     Services                                                                                                                   
     Offered by Representatives: Gara, Seaton                                                                                   
     30-GH2564O.24                                                                                                              
                                                                                                                                
     In  recent years,  Alaska has  not claimed  all of  the                                                                    
     federal Disproportionate Share  Hospitals (DSH) funding                                                                    
     to  which it  is entitled  due  to a  lack of  matching                                                                    
     funds and federal receipt  authority. With a commitment                                                                    
     of  $10.5   million  in  Alaska   Comprehensive  Health                                                                    
     Insurance (ACHI)  funds in FY2019,  the State  would be                                                                    
     able  to  leverage  an   additional  $10.5  million  of                                                                    
     federal DSH funds between FY19 and FY 21.                                                                                  
                                                                                                                                
     Currently,  there   is  a  major  gap   in  the  Alaska                                                                    
     Psychiatric   Institute's   (API)  ability   to   admit                                                                    
     patients,  due  to its  limited  capacity  of 80  beds.                                                                    
     Although  API is  claiming all  of the  DSH funding  to                                                                    
     which   it,  as   Alaska's   only  public   psychiatric                                                                    
     hospital, is currently entitled,  the State could claim                                                                    
     a  portion of  its unused  DSH funds  to support  other                                                                    
     hospitals  and  community  behavioral  health  programs                                                                    
     that are  especially impacted by the  lack of treatment                                                                    
     beds at API.                                                                                                               
                                                                                                                                
     Specifically, these additional  funds would enhance the                                                                    
     capacities  of the  State's  three existing  DSH-funded                                                                    
     hospital-based  mental  health treatment  programs  and                                                                    
     provide  new financial  support to  approximately three                                                                    
     other hospitals impacted by the  lack of treatment beds                                                                    
     at API.                                                                                                                    
                                                                                                                                
     These hospitals  have been working hard  to provide and                                                                    
     maintain safe environments for  patients who are court-                                                                    
     ordered to psychiatric evaluation  and treatment at API                                                                    
     (or  one of  the  other two  Designated Evaluation  and                                                                    
     Treatment hospitals). Many of  these patients are being                                                                    
     held for days and  sometimes longer in their hospitals'                                                                    
     emergency   departments  awaiting   transfer  to   API.                                                                    
     Services  provided would  depend on  what the  hospital                                                                    
     and,  in some  cases,  the  local community  behavioral                                                                    
     health  center  determines  makes the  most  sense  for                                                                    
     their   hospital/community,   ranging  from   physician                                                                    
     (including  psychiatric)  and   social  work  services,                                                                    
     additional security guards and  substance use or mental                                                                    
     health   services    (assessments,   evaluations),   to                                                                    
     discharge  planning and  converting emergency  rooms to                                                                    
     safe  rooms, etc.,  all geared  towards providing  more                                                                    
     appropriate   services  for   the   mentally  ill   and                                                                    
     relieving  the   stress  and  pressures   on  emergency                                                                    
     departments.                                                                                                               
                                                                                                                                
     While  two  other   existing  hospitals  have  approved                                                                    
     Certificates  of Need  to  expand  services to  provide                                                                    
     treatment  for   people  who  would  qualify   for  API                                                                    
     admission, these new services  will not be online until                                                                    
     early   2019  and   2020,   and   ultimately  are   not                                                                    
     anticipated  to meet  the existing  need. Further,  the                                                                    
     Department of Health and  Social Services has submitted                                                                    
     the  Section  1115  Behavioral Health  Medicaid  Waiver                                                                    
     application to  the Centers  for Medicare  and Medicaid                                                                    
     Services  (CMS)  which  will help  increase  access  to                                                                    
     community-based behavioral health services.                                                                                
                                                                                                                                
     Service  implementation will  take  multiple years  and                                                                    
     although it  is anticipated to  begin in 2020,  it will                                                                    
     be  based on  negotiations  with and  approval by  CMS.                                                                    
     This  enhanced DSH  funding approach  would enable  the                                                                    
     State  to  help  address  demonstrated  crisis  in  the                                                                    
     provision  of adequate  and appropriate  hospital-level                                                                    
     care for Alaskans experiencing a mental health crisis.                                                                     
                                                                                                                                
     Without additional resources there  will continue to be                                                                    
     expensive uncompensated care  at medical facilities for                                                                    
     patients they hold, waiting  for API Eliminates funding                                                                    
     for this increment added in the Governors FY19 budget.                                                                     
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Vice-Chair Gara  explained that  the Amendment  would delete                                                                    
Amendments  H HSS  16 and  H HSS  25 and  replace them  with                                                                    
Amendments H HSS  15 and H HSS 26.  The finance subcommittee                                                                    
passed an amendment to leverage  $1.9 million of federal DSH                                                                    
funds with $1.9 million in  funds from different sources. He                                                                    
mentioned the state  would be receiving $85  million in ACHI                                                                    
funds, $25 million  of which the state  had already received                                                                    
from Premera. The  state had stabilized their  costs and the                                                                    
excess profit was $25 million.  The federal government would                                                                    
be  returning  about $60  million  of  the funds  the  state                                                                    
appropriated.                                                                                                                   
                                                                                                                                
Vice-Chair Gara  informed the  committee that  the hospitals                                                                    
came to  him reporting that  API patients were  being housed                                                                    
in hospital  emergency rooms. The hospitals  could only bill                                                                    
for 1  day of their  stay. The hospitals were  not providing                                                                    
these  patients with  psychological treatment,  social work,                                                                    
or the  treatment they  needed. However,  they were  kept in                                                                    
the emergency  room because  the hospitals  had to.  At some                                                                    
point,  these patients  made it  to API,  but after  several                                                                    
days.                                                                                                                           
                                                                                                                                
Vice-Chair Gara thought matching  $1.9 million of ACHI funds                                                                    
to leverage $1.9  million of federal funds would  be a great                                                                    
solution. The amount divided  between hospitals equaled less                                                                    
than $1  million per hospital.  The hospitals wanted  to use                                                                    
the  funds  to hire  security  and  possibly build  security                                                                    
walls  or secured  rooms. He  relayed  a story  of a  doctor                                                                    
getting  punched by  a patient  and having  a black  eye. He                                                                    
realized that  $1.9 million would  make some  difference but                                                                    
not  a big  difference. The  amendment outlined  that for  a                                                                    
temporary  3-year program,  $3.5  million per  year in  ACHI                                                                    
funds and $3.6 million would  be leveraged in DSH funds. The                                                                    
amounts should  provide hospitals  an adequate sum  to build                                                                    
secured  rooms, hire  security, and  to provide  social work                                                                    
and behavioral  health treatment to patients  as they waited                                                                    
in   an  emergency   room.  It   was  costing   hospitals  a                                                                    
significant amount  of money and  costing patients  in terms                                                                    
of their care.                                                                                                                  
                                                                                                                                
3:19:39 PM                                                                                                                    
                                                                                                                                
Representative   Grenn  asked   which  hospitals   would  be                                                                    
affected by the amendment.  Vice-Chair Gara replied that the                                                                    
DSH  formula  was  based  on  the  percentage  of  Medicaid-                                                                    
eligible patients  it served. He  suggested that  a hospital                                                                    
in  a place  like  Orange County,  California  would not  be                                                                    
eligible,  but  most  hospitals in  Alaska  would  meet  the                                                                    
Medicaid  standards.  Places  such as  Providence  Hospital,                                                                    
Mat-Su  Regional  Hospital,  Alaska Regional  Hospital,  and                                                                    
Bartlett Hospital would qualify.  There was a question about                                                                    
whether  hospitals receiving  tribal funding  would qualify.                                                                    
He thought there  were 2 or 3 hospitals  housing patients in                                                                    
their emergency  rooms currently.  He confirmed  that Alaska                                                                    
Regional  Hospital  and  Providence Hospitals  were  on  the                                                                    
list. He thought roughly six were participating.                                                                                
                                                                                                                                
Representative  Guttenberg asked  for a  guesstimate of  the                                                                    
total amount  of uncompensated services  in the area  of API                                                                    
across  the medical  community  in  Alaska. Vice-Chair  Gara                                                                    
replied that the  director at API believed it  was more than                                                                    
the money  being appropriated in  the amendment.  He decided                                                                    
the  amount of  $3.5 million  each year  for 3  years was  a                                                                    
responsible amount to  use from the returned  ACHI funds. He                                                                    
was aware  there were folks  in the building looking  to use                                                                    
the funds  for other things.  He was proposing to  use $10.5                                                                    
million of ACHI funds over  three years to leverage $10.5 of                                                                    
federal funds. The cost to the hospitals was greater.                                                                           
                                                                                                                                
Representative  Guttenberg  suggested  that  the  assumption                                                                    
with the report and building  out the space, hospitals would                                                                    
have the  ability to house  more people and  be compensated.                                                                    
He  thought the  number would  go down  and the  communities                                                                    
would be safer.                                                                                                                 
                                                                                                                                
Vice-Chair Gara  replied that  it was not  the ideal  way to                                                                    
serve  the   patients  -  it  was   a  temporary  three-year                                                                    
solution.  He detailed  that by  the end  of 2020  the state                                                                    
hoped to  qualify for a federal  1115 waiver. It would  be a                                                                    
waiver that  would hopefully divert people  away from places                                                                    
like API with early  intervention. Regarding Alaska Regional                                                                    
Hospital and Mat-Su Regional Hospital,  one was committed to                                                                    
and  the  other was  considering  opening  up a  psychiatric                                                                    
ward. Other hospitals around the  state were making the same                                                                    
considerations.  In combination  with the  1115 waiver  that                                                                    
began in  2020 and the  additional rooms in  hospitals would                                                                    
be part of the solution but did not exist currently.                                                                            
                                                                                                                                
3:24:01 PM                                                                                                                    
                                                                                                                                
Representative   Wilson   expressed  confusion   about   the                                                                    
amendment. She thought the intent  of Amendment H HSS 14 was                                                                    
to determine what  could be done with  the money. Currently,                                                                    
Amendment  H HHS  15 was  appropriating  $10.5 million  from                                                                    
ACHI  funds  prior  to  receiving  the  report  proposed  in                                                                    
Amendment H  HSS 14, which  she was uncomfortable  with. She                                                                    
felt the  legislature was  guessing how  the funds  could be                                                                    
used. She did  not know the parameters of  the ACHI funding.                                                                    
She indicated  that the  hospital in  Fairbanks had  a ward,                                                                    
although  not very  large. She  thought the  legislature was                                                                    
getting ahead of itself.                                                                                                        
                                                                                                                                
Vice-Chair  Gara  replied  that   the  legislature  was  not                                                                    
jumping ahead.  He stressed that  if something was  not done                                                                    
someone  would get  hurt. He  thought patients  would become                                                                    
more expensive sitting in the  wrong place for too long. The                                                                    
purpose of  Amendment H HHS  14 was to  figure out a  way to                                                                    
better leverage federal dollars and  to monitor how they had                                                                    
been  used   and  how  effectively.  The   legislature,  the                                                                    
department,  and the  hospitals  convened  to determine  the                                                                    
things that  would be done including  building secure rooms,                                                                    
providing  heightened security,  providing social  work, and                                                                    
providing   needed  treatment.   He   emphasized  that   the                                                                    
population  he  was talking  about  consisted  of people  in                                                                    
danger  of hurting  themselves or  others.  He summarized  a                                                                    
letter from an emergency room doctor  who was in fear of her                                                                    
staffs' safety all day because  of the patients her hospital                                                                    
was holding in the Mat-Su area.                                                                                                 
                                                                                                                                
Representative Wilson clarified that  she was not advocating                                                                    
for  doing  nothing.  She noted  that  Vice-Chair  Gara  had                                                                    
listed  items that  she did  not believe  were covered.  She                                                                    
thought  the  committee should  wait  to  allocate the  ACHI                                                                    
funds.  She  suggested  using  the  $1.9  million  with  the                                                                    
matching funds and then wait.                                                                                                   
                                                                                                                                
3:28:03 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara referred  to a letter from  the Alaska State                                                                    
Hospital  and Nursing  Home Association  (ASHNHA)that stated                                                                    
exactly how they would use  the funds. It would be different                                                                    
for  each  hospital,  but  the   funds  would  be  used  for                                                                    
physicians,   social   work   services,   security   guards,                                                                    
substance   use,   mental   health   services,   assessment,                                                                    
evaluation,  discharge  planning   capacity,  and  renovated                                                                    
emergency  rooms  to  provide  for  secured  segregation  of                                                                    
certain patients  from kids or families.  They were examples                                                                    
of the  things the  hospitals would try  to juggle  with the                                                                    
limited amount of funding.                                                                                                      
                                                                                                                                
Representative  Grenn tended  to  agree with  Representative                                                                    
Wilson about the  study in Amendment H HHS  14. However, the                                                                    
legislature would not receive  a report until November 2019.                                                                    
He thought waiting 18 months for  a report to address a need                                                                    
was immediate  was too long.  He asked if the  $10.5 million                                                                    
was a  minimum investment amount  by the state.  He wondered                                                                    
where the figure came from.                                                                                                     
                                                                                                                                
Vice-Chair  Gara replied  that they  could go  back to  $1.9                                                                    
million, but  it would  provide a  limited amount  of funds.                                                                    
The $3.5  million would provide  a somewhat  adequate amount                                                                    
distributed  between  hospitals.  There was  no  minimum  or                                                                    
maximum. There was roughly $10  million that the state could                                                                    
match 50/50. The  state did not have  $10 million available,                                                                    
but  it had  $3.5 million  in  the returned  ACHI funds.  He                                                                    
stressed that  they could not  have a system  where doctors,                                                                    
nurses, and other patients were being assaulted.                                                                                
                                                                                                                                
3:30:50 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton relayed  that the  ACHI money  was one-time                                                                    
funding done  on a  3-year increment.  The problem  was that                                                                    
behavioral  Health was  the least  adequately funded  in the                                                                    
State of Alaska. The money  would help. The ACHI funding was                                                                    
insurance money.                                                                                                                
                                                                                                                                
Representative  Thompson recalled  receiving  a letter  from                                                                    
ASHNHA  asking  legislators  to  support  the  $3.9  million                                                                    
because  it would  be leveraged  into $3.7  million. He  was                                                                    
confused by the figures.                                                                                                        
                                                                                                                                
Vice-Chair  Gara replied  that his  office, the  department,                                                                    
and the hospitals  came up with the amendment.  He told them                                                                    
what he  thought the state could  afford it in terms  of the                                                                    
ACHI funds.  They came back to  the state to relay  that not                                                                    
all  items  could  be provided.  Representative  Seaton  had                                                                    
suggested handling  the issue in  a manner that  would allow                                                                    
the  hospitals to  get the  funds they  needed to  house and                                                                    
help these people for a  3-year period while waiting for the                                                                    
1115 waiver to go into effect.                                                                                                  
                                                                                                                                
Co-Chair Seaton added  that the $10 million  DSH funds would                                                                    
have  reverted back  to the  federal government  without the                                                                    
amendment.  The question  was whether  the state  needed the                                                                    
facilities and treatment in Alaska.                                                                                             
                                                                                                                                
Representative Pruitt  had a question about  the ACHI funds.                                                                    
He pointed out  that the returned $25 million  from the ACHI                                                                    
fund  was   already  slated  for  use   in  another  manner.                                                                    
Currently, there  was a bill  on the House floor  that would                                                                    
use  $30  million  from  the ACHI  fund  to  fund  community                                                                    
revenue  sharing. He  asked if  the fund  could be  used for                                                                    
various  purposes.  He  asked  someone  to  comment  on  the                                                                    
viability of the fund.                                                                                                          
                                                                                                                                
Co-Chair  Seaton  asked  someone  from  Legislative  Finance                                                                    
Division to come to the table.                                                                                                  
                                                                                                                                
Ms.  Sanders responded  that  when  the initial  reinsurance                                                                    
program  began,  there were  3  years  of premium  insurance                                                                    
taxes that  were deposited into  the ACHI fund.  She relayed                                                                    
that for FY 16, FY 17, and  FY 18 $60 million went into each                                                                    
year  totaling  about $175  million.  There  was an  initial                                                                    
appropriation  of  $55 million  for  the  FY 17  reinsurance                                                                    
program. The  State of  Alaska applied  for the  1332 waiver                                                                    
and was  approved, which changed the  reinsurance program to                                                                    
be partially  federally funded  and partially  state funded.                                                                    
There was  a second appropriation  for $55 million  that was                                                                    
going to cover  FY 18 thru FY 23.  Approximately $11 million                                                                    
per year would  have been used to match  $44 million federal                                                                    
funds. Those  were the only  2 appropriations made  from the                                                                    
fund.  After  FY  17  was  completed  Premera  returned  $25                                                                    
million  to the  State of  Alaska because  insurance premium                                                                    
costs  were  lower  than  anticipated.  It  left  about  $93                                                                    
million  in the  ACHI  Fund. The  other bill  Representative                                                                    
Pruitt was speaking to used  approximately $25 million still                                                                    
leaving money available for other uses.                                                                                         
                                                                                                                                
3:37:10 PM                                                                                                                    
                                                                                                                                
Representative  Pruitt asked  if any  additional funds  were                                                                    
being  added  to the  fund.  Ms.  Sanders replied  that  the                                                                    
existing statute  was scheduled to  sunset at the end  of FY                                                                    
18. No  future deposits  would be made  into the  ACHI fund.                                                                    
The  insurance  premium  taxes  would  revert  back  to  the                                                                    
general fund.                                                                                                                   
                                                                                                                                
Representative Pruitt  asked if  she anticipated  any demand                                                                    
on the fund in the  future. Ms. Sanders responded that LFD's                                                                    
recommendation was  to leave  a small  balance of  less than                                                                    
$10 million in the fund  to address any potential unforeseen                                                                    
cost that  might arise between now  and FY 22, 5  years from                                                                    
now. Recently, there  was a press release  by the governor's                                                                    
office  that  the  federal  portion that  was  going  to  be                                                                    
covered in FY 18 was  higher than anticipated. The state was                                                                    
heading in a  direction where more costs  were being covered                                                                    
by  the federal  government  more than  LFD had  anticipated                                                                    
with the $11 million and  $44 million split. The Legislative                                                                    
Finance  Division's  recommendation  was to  leave  a  small                                                                    
balance. However,  there was funding available  presently to                                                                    
appropriate elsewhere.                                                                                                          
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
There being  NO further  OBJECTION, Amendments  H HSS  15, H                                                                    
HSS 16, H HSS 25, H HSS 26 were ADOPTED.                                                                                        
                                                                                                                                
3:39:47 PM                                                                                                                    
                                                                                                                                
Representative  Tilton MOVED  to  ADOPT Amendment  H HSS  17                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Health Care Services                                                                                                       
     Medical Assistance Administration                                                                                          
     H HSS 17                                                                                                                   
     Commodities Reduction Based on FY17 Actual Levels Plus                                                                     
     Adjustment for CPI                                                                                                         
     Offered by Representative Tilton                                                                                           
                                                                                                                                
     Decrement Commodities from 2017 Actual Levels plus                                                                         
     adjustment for CPI                                                                                                         
                                                                                                                                
Vice-Chair Gara OBJECTED for discussion.                                                                                        
                                                                                                                                
Representative Tilton read the amendment (see above).                                                                           
                                                                                                                                
Vice-Chair  Gara spoke  in opposition  of the  amendment. He                                                                    
conveyed that although he understood  the motivation for the                                                                    
amendment, he did  not agree with the policy.  He noted that                                                                    
the proposed cut of $43,600  were matching funds. Therefore,                                                                    
the  reduction was  actually $87,000.  It was  a 54  percent                                                                    
reduction  in  the  commodities  line.  Medicaid  assistance                                                                    
administration   served   roughly   30,000   more   Medicaid                                                                    
recipients than the state had  4 years prior. However, their                                                                    
budget had  remained relatively  flat. Commodities  could be                                                                    
computers, standing desks for workers,  or a number of other                                                                    
things.  He could  not  think of  a  good justification  for                                                                    
taking away  $87,000 in funding,  half of which  was federal                                                                    
funding.                                                                                                                        
                                                                                                                                
Representative  Tilton relayed  that  under the  commodities                                                                    
line in the FY 17 actuals  it stated that it was $48,000 and                                                                    
the  FY  19 request  was  $160,000.  She  thought it  was  a                                                                    
significant increase  for office and business  supplies. She                                                                    
asked for support on her amendment.                                                                                             
                                                                                                                                
Vice-Chair Gara MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Grenn,  Guttenberg, Kawasaki, Ortiz,  Gara, Seaton,                                                                    
Foster                                                                                                                          
                                                                                                                                
The MOTION to adopt Amendment H HSS 17 FAILED (4/7).                                                                            
                                                                                                                                
3:43:31 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton  WITHDREW original  L  H  HSS 18  (copy  on                                                                    
file).                                                                                                                          
                                                                                                                                
     Public Assistance                                                                                                          
     Alaska Temporary Assistance Program                                                                                        
     HSS 18 - Funding to Satisfy Federal                                                                                        
     Maintenance of Effort Requirements (FY19-FY20)                                                                             
     Offered by Representative Seaton                                                                                           
     See 30-GH25640.30                                                                                                          
                                                                                                                                
     In FY18  the Department  of Health and  Social Services                                                                    
     has requested  a supplemental of $2  million to satisfy                                                                    
     federal  maintenance of  effort requirements  and avoid                                                                    
     federal  penalties  that  would also  impact  the  FY19                                                                    
     budget. Given the current  FY18 problem, this amendment                                                                    
     adds  $4 million  of one-time  funds that  may only  be                                                                    
     used to satisfy MOE requirements  in FY19 and FY20. The                                                                    
     fund  source   is  the  Commercial   Charter  Fisheries                                                                    
     Revolving Loan  Fund. The fund  has nearly  $5 million,                                                                    
     only one $28.1  loan is outstanding, the  loan to asset                                                                    
     ratio  is  an  extremely  low 1%,  and  projected  loan                                                                    
     demand is just  $45.0 per year. The  remaining net cash                                                                    
     available for loans would  be approximately $787.0 with                                                                    
     a very low loan to asset ratio of 17%.                                                                                     
                                                                                                                                
Co-Chair Seaton MOVED to ADOPT Replacement Amendment H HSS                                                                      
18 (copy on file):                                                                                                              
                                                                                                                                
     Public Assistance                                                                                                          
     ATAP                                                                                                                       
     Replacement H HSS 18                                                                                                       
     Offered by: Representative Seaton                                                                                          
     Funding  to  Satisfy   Federal  Maintenance  of  Effort                                                                    
     Requirements (FY19-FY20)                                                                                                   
     Language, MultiYr                                                                                                          
                                                                                                                                
     Explanation:                                                                                                               
     See 30-GH2564O.31                                                                                                          
                                                                                                                                
     In FY18  the Department  of Health and  Social Services                                                                    
     has requested  a supplemental of $2  million to satisfy                                                                    
     federal  maintenance of  effort requirements  and avoid                                                                    
     federal  penalties  that  would also  impact  the  FY19                                                                    
     budget. Given the current  FY18 problem, this amendment                                                                    
     adds  $3 million  of one-time  funds that  may only  be                                                                    
    used to satisfy MOE requirements in FY19 and FY20.                                                                          
                                                                                                                                
     The  fund source  is the  Commercial Charter  Fisheries                                                                    
     Revolving Loan Fund. The fund  has nearly $5 million in                                                                    
     cash, only one  $28.1 loan is outstanding,  the loan to                                                                    
     asset  ratio  is  an  extremely   low  1  percent,  and                                                                    
     projected  loan  demand is  just  $45.0  per year.  The                                                                    
     remaining net cash available for  loans (assuming H DFG                                                                    
     18 is also adopted)  would be approximately $787.0 with                                                                    
     a very low loan to asset ratio of 17 percent.                                                                              
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair Seaton read the amendment (see above).                                                                                 
                                                                                                                                
3:44:56 PM                                                                                                                    
                                                                                                                                
Representative Wilson discussed  her objection. She reported                                                                    
in the prior year the  legislature moved money from one area                                                                    
and  asked if  it would  affect the  federal maintenance  of                                                                    
effort  requirements. She  recollected that  the legislature                                                                    
was  told  no.  Presently,  it  appeared  that  it  was  not                                                                    
necessarily  true. She  reported that  about $2  million was                                                                    
moved from  the Public Assistance  Program to the  Office of                                                                    
Children's  Services.  She  wanted  to  verify  whether  the                                                                    
transfer was the cause of the state's current issue.                                                                            
                                                                                                                                
Vice-Chair   Gara   replied   that   the   legislature   had                                                                    
transferred excess public  assistance funds. The legislature                                                                    
met its  adult public  assistance needs  in the  prior year.                                                                    
The legislature  did not  underfund adult  public assistance                                                                    
by moving those funds.                                                                                                          
                                                                                                                                
Representative  Wilson  wondered  about the  source  of  the                                                                    
problem  of   not  meeting  the  requirement.   She  thought                                                                    
something had changed.                                                                                                          
                                                                                                                                
Co-Chair  Seaton invited  a representative  from LFD  to the                                                                    
table.                                                                                                                          
                                                                                                                                
KELLY  CUNNINGHAM,  ANALYST, LEGISLATIVE  FINANCE  DIVISION,                                                                    
asked  Representative   Wilson  to  restate   the  question.                                                                    
Representative Wilson complied.                                                                                                 
                                                                                                                                
Ms. Cunningham answered  that a $7 million cut in  FY 17 and                                                                    
an  additional $3  million cut  in  FY 18  were the  causes.                                                                    
However, the legislature gave the  department intent to hire                                                                    
a  contractor   to  seek  out  third   party  claiming.  The                                                                    
department  was successful  at identifying  $8.9 million  in                                                                    
third party claiming for the  last year. She noted the prior                                                                    
year was only  $2.9 million. They were not  able to identify                                                                    
enough third party claiming to  make up the shortfall of the                                                                    
$3  million reduction  from the  prior year.  The department                                                                    
received  the reduction  in hopes  that they  could identify                                                                    
additional  third party  claiming, however,  it did  not pan                                                                    
out as anticipated.                                                                                                             
                                                                                                                                
Representative Wilson asked where  the money would be spent,                                                                    
as the money was a match  rather than an ask to avoid losing                                                                    
federal funds. Ms. Cunningham deferred to the department.                                                                       
                                                                                                                                
Co-Chair Seaton pointed out that  there was a restriction in                                                                    
the amendment that  the money could only be  used to satisfy                                                                    
the maintenance of effort requirements in FY 19 and FY 20.                                                                      
                                                                                                                                
3:49:11 PM                                                                                                                    
                                                                                                                                
Ms.  O'Brien  answered  that  one   of  the  reductions  the                                                                    
department had taken was an  offset for federal funding. The                                                                    
department was increasing the  state's federal authority for                                                                    
the  reduction  it took  in  general  funds. Currently,  the                                                                    
department  was   paying  for  the  benefits   with  federal                                                                    
authority. It would allow the  state to pay for the benefits                                                                    
with  funding sources  that allowed  the department  to meet                                                                    
the  maintenance  of   effort.  In  this  case,   it  was  a                                                                    
designated general fund  source which could also  be used to                                                                    
satisfy maintenance of effort.                                                                                                  
                                                                                                                                
Representative Wilson  remained confused.  She asked  if the                                                                    
state  had to  spend  general fund  money.  She wondered  if                                                                    
general  funds  were being  used  to  backfill to  meet  the                                                                    
maintenance of effort.                                                                                                          
                                                                                                                                
Ms. O'Brien  responded that the department's  maintenance of                                                                    
effort requirement  for the  Temporary Assistance  for Needy                                                                    
Families  (TANF)  block grant  was  about  $36 million.  The                                                                    
requirement  was an  annual prerequisite  regardless of  how                                                                    
much  money  the  state  actually   spent  on  the  program.                                                                    
Fortunately for Alaska,  it spent enough for  the program in                                                                    
various  ways  that  the state  had  those  expenditures  to                                                                    
spend. In other words, the  state spent at least $36 million                                                                    
for eligible  expenditures for the TANF  program. Currently,                                                                    
the state was spending federal  funds in addition to general                                                                    
funds   on  temporary   assistance  program   benefits.  The                                                                    
amendment   would  allow   the   department   to  meet   the                                                                    
maintenance of  effort without  having to  pay a  penalty or                                                                    
fine.  Presently,  the  state  was  spending  the  following                                                                    
year's money  trying to  meet the  maintenance of  effort in                                                                    
advance. If  the state were  to get penalized or  fined, the                                                                    
state would continually be behind  and would have to ask for                                                                    
supplementals  to   address  the   need  with   the  federal                                                                    
government.                                                                                                                     
                                                                                                                                
Representative Wilson  suggested that if the  maintenance of                                                                    
effort was not  required, the department would  not need the                                                                    
money  as the  program  was running  without  it. She  asked                                                                    
about  the amount  of  the  penalty and  whether  it was  an                                                                    
annual or monthly fine.                                                                                                         
                                                                                                                                
Ms.  O'Brien  replied that  the  requirement  was an  annual                                                                    
obligation. The department had until  the end of the federal                                                                    
fiscal year to  satisfy the requirement for  the block grant                                                                    
funds. The department received about  $45 million in federal                                                                    
funds in addition to the $36  million that it had to meet in                                                                    
maintenance of effort. The program  had the ability to spend                                                                    
the   total  amount.   The  state   did   not  have   enough                                                                    
expenditures to  do so. She  relayed that to the  extent the                                                                    
department was able  to leverage those funds  in other areas                                                                    
such as  the Child  Advocacy Centers  in OCS,  and Childcare                                                                    
Assistance. The  department was using the  federal funds for                                                                    
leveraging  purposes.  The  general  fund  spend  was  still                                                                    
required.                                                                                                                       
                                                                                                                                
Representative Wilson  asked about the penalty.  Ms. O'Brien                                                                    
replied that the fine was  dollar for dollar. She elaborated                                                                    
that  for  every  dollar  the  state  did  not  satisfy  for                                                                    
maintenance  of  effort  was the  penalty.  Co-Chair  Seaton                                                                    
added that the state not only  got penalized, it had to make                                                                    
the  expenditures  from  the  general  fund.  Representative                                                                    
Wilson understood.                                                                                                              
                                                                                                                                
Vice-Chair Gara  stated that the  issue had arisen  a couple                                                                    
of  years   back.  He  asked   for  verification   that  the                                                                    
maintenance  of  effort  was  a  Medicaid  requirement.  Ms.                                                                    
O'Brien replied  in the negative.  Vice-Chair Gara  asked if                                                                    
the  maintenance  of  effort  had  to  do  with  the  Alaska                                                                    
Temporary Assistance  Program (ATAP). Ms.  O'Brien responded                                                                    
in the positive.                                                                                                                
                                                                                                                                
Vice-Chair Gara  reported that there  were cuts in  ATAP and                                                                    
the House Finance Committee was  warned that the state would                                                                    
be very  close if  not violating  the maintenance  of effort                                                                    
requirements.  The  department   sought  and  found  private                                                                    
spending. There was certain  private spending that qualified                                                                    
for maintenance of effort, so  they were not using all state                                                                    
funds  to meet  the maintenance  of effort  requirement. The                                                                    
department  had  been  as  creative  as  possible,  and  the                                                                    
legislature was warned.                                                                                                         
                                                                                                                                
Representative Ortiz  supported the intent of  the amendment                                                                    
but had  a question about the  fund source. He asked  if the                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
(DCCED)  had   been  notified  about  it   coming  from  the                                                                    
Commercial  Charter   Fisheries  Revolving  Loan   Fund  and                                                                    
whether it approved it.                                                                                                         
                                                                                                                                
3:54:43 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:55:12 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Seaton replied  that  DCCED was  notified and  was                                                                    
fine with the use of the  funds, as they were not needed for                                                                    
balancing loans.  There were  sufficient funds  remaining to                                                                    
make additional loans.                                                                                                          
                                                                                                                                
Representative  Guttenberg  asked  how many  maintenance  of                                                                    
effort   components   existed.   Ms.   O'Brien   asked   for                                                                    
clarification.                                                                                                                  
                                                                                                                                
Representative Guttenberg  replied he  was only  speaking to                                                                    
the  specific   program.  He  also   asked  how   close  the                                                                    
department  got to  not meeting  the  maintenance of  effort                                                                    
requirements.  Ms. O'Brien  asked  if he  was talking  about                                                                    
just the one  maintenance of effort or all  of the different                                                                    
maintenance of efforts.  Representative Guttenberg asked her                                                                    
to address the one being discussed.                                                                                             
                                                                                                                                
Ms. O'Brien indicated that, with  the particular program, in                                                                    
past  years  the department  mostly  had  not had  an  issue                                                                    
meeting the  maintenance of  effort requirement.  The Alaska                                                                    
Temporary  Assistance  Program had  a  UGF  budget of  $13.9                                                                    
million  for  many years.  That  program  combined with  the                                                                    
Tribal  Assistance Program  was largely  how the  department                                                                    
satisfied  the maintenance  of  effort requirement.  Several                                                                    
years prior, the department was  asked to find other sources                                                                    
of  funding  to  meet  maintenance of  effort.  It  hired  a                                                                    
contractor to help look at  what other states were doing, to                                                                    
explore other avenues, and to  work with non-profit entities                                                                    
to  find out  whether their  data would  be supportive.  The                                                                    
department was  successful in achieving  about a  $3 million                                                                    
in-kind maintenance  of effort match. In  the previous year,                                                                    
the amount  was increased by  about another $5  million. The                                                                    
department had experienced successes.                                                                                           
                                                                                                                                
Ms. O'Brien  continued that there  was not  always certainty                                                                    
to the numbers;  the department did not  always know exactly                                                                    
the  value  of  the in-kind  contributions.  Typically,  the                                                                    
department had a general idea  of its spending and was aware                                                                    
of  the amount  needed to  be made  up. In  some cases,  the                                                                    
department  might  transfer  authority that  was  excess  in                                                                    
other places  to help satisfy  the gap. In the  last several                                                                    
years, the numbers  had been very close.  The department had                                                                    
had  a difficult  time satisfying  the  requirements to  the                                                                    
point  where the  department exhausted  all  of the  general                                                                    
funds  in the  first quarter  of  the state  fiscal year  in                                                                    
order  to satisfy  the federal  fiscal year  requirement. It                                                                    
limited  what it  could  do for  the  following fiscal  year                                                                    
which was where the department was at currently.                                                                                
                                                                                                                                
Representative  Tilton   asked  about  the   funding  source                                                                    
number.  Previously the  committee had  been discussing  the                                                                    
ACHI funds and relating those  to health funds. She asked if                                                                    
the ACHI funds could be used  in place of the funding source                                                                    
listed.                                                                                                                         
                                                                                                                                
Ms. O'Brien  was not familiar  enough with the  ACHI funding                                                                    
source to know if there  were any limitations in its ability                                                                    
to match  federal funds.  She suggested that  as long  as it                                                                    
was not matching  another federal source it  could likely be                                                                    
used  in that  manner.  The only  requirement  was that  the                                                                    
funds  were not  used to  match some  other federal  funding                                                                    
source.                                                                                                                         
                                                                                                                                
Representative Tilton  was asking  the question  because, if                                                                    
it was already  established that the ACHI  funds were health                                                                    
related  and the  funding source  currently  being used  had                                                                    
more to do with economic  development, she thought the state                                                                    
would be better served by using a different funding source.                                                                     
                                                                                                                                
4:00:08 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  responded that  the loan  fund had  had one                                                                    
$28,000  loan with  a 1  percent loan  to asset  ratio; over                                                                    
time  it   had  not  been   used.  He  questioned   why  the                                                                    
legislature  would allow  that  much funding  to  sit in  an                                                                    
account being  underutilized. It was thought  there would be                                                                    
a  higher   demand  for  loans  from   the  charter  fishery                                                                    
revolving  loan  fund. The  demand  was  not there,  and  he                                                                    
thought the proposed purpose would  be an appropriate use of                                                                    
the fund.  The fund would increase  to a 17 percent  loan to                                                                    
asset ratio - a very healthy ratio.                                                                                             
                                                                                                                                
Representative  Wilson asked  if  it  was Co-Chair  Seaton's                                                                    
intent to  look at  other funds that  could be  utilized for                                                                    
economic development in the  capital budget. Co-Chair Seaton                                                                    
answered that the  item had been put forward in  the past as                                                                    
an  economic development  tool. It  was not  otherwise being                                                                    
used  as  had  been  anticipated. He  had  not  looked  into                                                                    
eliminating the  program. He thought taking  some money sent                                                                    
a strong signal that if it  was not being utilized, it would                                                                    
be used  somewhere else. They anticipated  using $780,000 in                                                                    
the coming  year. It  was using money  that to-date  had not                                                                    
been used.                                                                                                                      
                                                                                                                                
Representative Wilson  was supportive of the  amendment. She                                                                    
highlighted  that  there  were several  smaller  funds  that                                                                    
should be  looked out. She  thought if nobody was  using the                                                                    
funds, they could  be used somewhere else.  She was thankful                                                                    
for the amendment.                                                                                                              
                                                                                                                                
Co-Chair  Seaton appreciated  Representative Thompson  bring                                                                    
forward the  indirect expenditure  report. He was  trying to                                                                    
be as efficient as possible.                                                                                                    
                                                                                                                                
Representative Pruitt believed  a larger conversation should                                                                    
take  place  about where  to  place  the funds.  In  certain                                                                    
cases, it  might be appropriate  to look at phasing  some of                                                                    
the  funds  out,   if  they  were  not   being  utilized  as                                                                    
anticipated.  He  suggested getting  the  state  out of  the                                                                    
business of certain loans. He supported the amendment.                                                                          
                                                                                                                                
4:06:29 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:19:54 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
Representative Kawasaki OBJECTED.                                                                                               
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN  FAVOR: Guttenberg,  Kawasaki,  Ortiz, Pruitt,  Thompson,                                                                    
Tilton, Wilson, Gara, Grenn, Foster, Seaton                                                                                     
OPPOSED: None                                                                                                                   
                                                                                                                                
The  MOTION   to  adopt  Amendment  Replacement   H  HSS  18                                                                    
PASSED (11/0).                                                                                                                  
                                                                                                                                
4:21:08 PM                                                                                                                    
                                                                                                                                
Representative  Tilton MOVED  to  ADOPT Amendment  H HSS  19                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Public Assistance Administration                                                                                           
     H HSS 19 - Decrement                                                                                                       
     Offered by Representative Tilton                                                                                           
                                                                                                                                
     Decrement to Travel from 2017 Actual Levels plus                                                                           
     adjustment for CPI                                                                                                         
                                                                                                                                
Vice-Chair Gara OBJECTED for discussion.                                                                                        
                                                                                                                                
Representative Tilton  read the  amendment (see  above). She                                                                    
reported  that  the amendment  reduced  the  travel line  of                                                                    
$154,000 by  $28,000 leaving  the travel line  at the  FY 17                                                                    
level and accounting for inflation.                                                                                             
                                                                                                                                
Vice-Chair Gara  explained his  objection. He  reported that                                                                    
costs were  increasing in Public  Assistance. The  number of                                                                    
clients were  increasing. The state  was in the middle  of a                                                                    
recession  and the  number  of  public benefit  applications                                                                    
from 2016  to now  had increased  on a  monthly basis  by 40                                                                    
percent from 10,000 to 14,000  per month. The division had a                                                                    
huge backlog  of roughly 20,000 claims  for public benefits.                                                                    
The travel  money was used  to go out to  supervised workers                                                                    
who  were turning  over  at  an alarming  rate  of about  31                                                                    
percent per year.                                                                                                               
                                                                                                                                
Vice-Chair Gara  continued that a 3-year  solution was being                                                                    
proposed in another portion of  the budget. Presently, there                                                                    
was amazing burn-out, travel for  supervision, and travel to                                                                    
work  on  the continuing  problem  with  the ARIES  computer                                                                    
system. He  reported that the  proposed cut of  $28,900 came                                                                    
with federal match dollars, which  would result in an actual                                                                    
cut of about  $45,000 if the amendment  passed. The division                                                                    
had  acted responsibly  even with  more people  on benefits.                                                                    
The division was approximately $32.0  million below in state                                                                    
general fund spending  than it was in FY  15. The division's                                                                    
actuals were  $1.2 million  below what they  were in  FY 17.                                                                    
There  were 30,000  to 40,000  more people  on Medicaid.  He                                                                    
thought  it  was amazing  that  the  division had  kept  its                                                                    
budget  $32  million  below  where  it  was  in  FY  15.  He                                                                    
emphasized that the funds were needed.                                                                                          
                                                                                                                                
4:23:38 PM                                                                                                                    
                                                                                                                                
Representative Wilson wanted to  discuss the amendment which                                                                    
pertained to travel. She asked  the sponsor of the amendment                                                                    
to elaborate about  past travel expenses versus  what it was                                                                    
presently. She wondered if the  amendment had anything to do                                                                    
with the ARIES system. She asked for clarification.                                                                             
                                                                                                                                
Representative  Tilton relayed  that  the actuals  in FY  17                                                                    
were  $28,800 in  travel and  the request  was $186,600  - 6                                                                    
times the cost of the  prior year's budget. The description,                                                                    
per the  department, was  administrative travel  to regional                                                                    
and   national  conferences   to  review   changes,  provide                                                                    
analysis, and propose national legislation.                                                                                     
                                                                                                                                
Vice-Chair  Gara responded  that the  budget for  the public                                                                    
assistance  administration  was  $1.2 million  below  FY  17                                                                    
actuals. The  travel costs  that the  funds could  and would                                                                    
likely be  used for was for  travel to work on  the problems                                                                    
with  the   ARIES  system  across  the   state.  Travel  was                                                                    
necessary to  supervise and train  new workers, which  was a                                                                    
constant  need within  the division.  The goal  was to  have                                                                    
employees working around  the state rather than  in one main                                                                    
office. He reported  that if the dollars  were removed, they                                                                    
would come back in a supplemental budget request.                                                                               
                                                                                                                                
Co-Chair  Seaton  noted  that  if  funds  were  not  at  the                                                                    
allocation level,  funds could be moved  between line items.                                                                    
He thought it was difficult to only discuss on line item.                                                                       
                                                                                                                                
Representative  Wilson  wondered   why  the  department  put                                                                    
something in  travel when  they thought  they would  need it                                                                    
somewhere else.  She reemphasized  the increase of  almost 6                                                                    
times the  previous allocation amount.  She did  not believe                                                                    
the caseload  increases and the  issues with ARIES  were new                                                                    
to the department. She wanted  to know more accurately where                                                                    
the money was being spent.                                                                                                      
                                                                                                                                
Co-Chair  Seaton  noted an  opioid  crisis  and there  being                                                                    
several conferences offered  on the topic. He  was not going                                                                    
to   determine,  through   the   budgeting  process,   which                                                                    
conferences  department  employees   could  attend.  He  was                                                                    
looking  at the  appropriation level  when budgeting  rather                                                                    
than the line items. As long  as spending did not exceed the                                                                    
appropriation amount, he was not concerned.                                                                                     
                                                                                                                                
Representative Ortiz  asked if the department  was available                                                                    
to  provide  further  information   on  the  impact  of  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
4:28:24 PM                                                                                                                    
                                                                                                                                
Ms. O'Brien responded that the  travel budget for the Public                                                                    
Assistance    Administration   staff    was   largely    for                                                                    
administrative type travel  including supervision, training,                                                                    
and system development  meetings. The department anticipated                                                                    
things   that  would   happen  throughout   the  year.   The                                                                    
department  anticipated that  spending  would  be a  certain                                                                    
amount based on a planning effort.  In the past year and the                                                                    
year prior  to that, the  department had done  a significant                                                                    
amount  of  cost  containment  in  travel  and  hiring.  The                                                                    
containment  could  be  seen   in  the  department's  lapsed                                                                    
balances  where the  division and  the department  had taken                                                                    
extra steps  to reduce  travel needs. For  the FY  19 budget                                                                    
the  division budgeted  their travel  at the  same level  as                                                                    
they  had been  in prior  years anticipating  they would  be                                                                    
doing a large amount of work on the ARIES program.                                                                              
                                                                                                                                
Representative Tilton  pointed to  the "Other  Travel Costs'                                                                    
line. The request  was $73,000 and the actual  was $300. She                                                                    
noted that the travel request  was 6 times more overall than                                                                    
the actual  amount spent  and 3  times without  counting the                                                                    
match.                                                                                                                          
                                                                                                                                
Vice-Chair Gara MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Pruitt, Thompson, Tilton, Wilson, Grenn                                                                               
OPPOSED: Kawasaki, Ortiz, Gara, Guttenberg, Seaton, Foster                                                                      
                                                                                                                                
The MOTION to adopt Amendment H HSS 19 FAILED (5/6).                                                                            
                                                                                                                                
4:30:56 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara MOVED  to ADOPT Amendment H HSS  20 (copy on                                                                    
file):                                                                                                                          
                                                                                                                                
     Public Assistance Field Services                                                                                           
     H HSS 20                                                                                                                   
     Pursue Development of a Single                                                                                             
    On-line Application for Public Assistance Programs                                                                          
     Offered by Representative Gara                                                                                             
                                                                                                                                
     Wordage:                                                                                                                   
     It is the  intent of the legislature  that the Division                                                                    
     of Public Assistance pursue  opportunities to work with                                                                    
     Code   for  America   to  develop   a  single   on-line                                                                    
     application for  public assistance  programs, including                                                                    
     Medicaid,    Adult   Public    Assistance,   and    the                                                                    
     Supplemental  Nutrition  and  Assistance  Program,  and                                                                    
     report back to the legislature  on its progress by Nov.                                                                    
     15, 2018 and again on November 15, 2019.                                                                                   
                                                                                                                                
     Explanation:                                                                                                               
     Code  for America  is a  national nonprofit  that helps                                                                    
     governments and  others to  build technology  to create                                                                    
     healthy,  prosperous, and  safe communities.  They have                                                                    
     worked with more than 100  local governments across the                                                                    
     U.S.,  including the  Municipality  of Anchorage.  Code                                                                    
     for  America  has  tentatively  expressed  interest  in                                                                    
     donating  its   services  to   DHSS  to   simplify  the                                                                    
    application process for public assistance programs.                                                                         
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Vice-Chair Gara explained that the  amendment had come up in                                                                    
discussions by  Representative Johnston and  the department.                                                                    
He  reported that  Division of  Public  Assistance had  been                                                                    
hampered  by the  ARIES  system that  had  not performed  as                                                                    
advertised.  The department  had fired  the contractor.  The                                                                    
goal  of   the  ARIES  system   had  been  to   have  online                                                                    
applications.   An    individual   could    download   their                                                                    
application online,  but they could not  submit them online.                                                                    
Therefore,   it  was   not  possible   to  have   an  online                                                                    
application system  that spoke  to the data  system allowing                                                                    
for research to be done to determine a person's benefits.                                                                       
                                                                                                                                
Vice-Chair Gara continued  that Code for America  was a non-                                                                    
profit  that   helped  states   looking  to   combine  their                                                                    
applications,   for  example.   Potentially,  Adult   Public                                                                    
Assistance  and   Medicaid  could   be  combined   into  one                                                                    
application. The  department would be meeting  with Code for                                                                    
America in  April about free  services to the state  to help                                                                    
with the  applications process. They could  likely help with                                                                    
the applications  process. However,  there was the  issue of                                                                    
someone  applying  and  whether   the  system  conveyed  the                                                                    
information or whether  research would have to be  done on a                                                                    
client. There  was some outside  hope that Code  for America                                                                    
could  help  for  no  cost  as  well.  The  intent  language                                                                    
encouraged the department to work  with Code for America and                                                                    
to let the legislature know the outcome of the effort.                                                                          
                                                                                                                                
Representative  Wilson asked  if the  department would  take                                                                    
the  same action  without the  intent in  the amendment.  It                                                                    
sounded like  the department was  already acting.  She asked                                                                    
if  it was  the  report he  wanted to  ensure  was done  and                                                                    
provided to the legislature.                                                                                                    
                                                                                                                                
Vice-Chair  Gara  relayed that  the  goal  was that  reports                                                                    
would be submitted  to the legislature on  November 15, 2018                                                                    
and  November  15,   2019.  He  thought  if   he  asked  the                                                                    
department to  supply the reports  without the  amendment in                                                                    
place, it would.  He also wanted to recognize  the work done                                                                    
by  Representative Johnston  in  subcommittee.  She had  had                                                                    
many insightful  comments on the  issue. She wanted  to know                                                                    
what the efforts were in working with Code for America.                                                                         
                                                                                                                                
4:34:05 PM                                                                                                                    
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
Representative Kawasaki OBJECTED for discussion.                                                                                
                                                                                                                                
Representative Kawasaki  indicated that  assistance programs                                                                    
such as  Medicaid, Adult Public Assistance  (APA), ATAP, and                                                                    
Supplemental  Nutrition   Assistance  Program   (SNAP),  had                                                                    
imbedded  asset tests  that were  required.  Other types  of                                                                    
public   assistance   like    senior   benefits,   childcare                                                                    
assistance,  and  the   Low-Income  Home  Energy  Assistance                                                                    
Program  (LIHEAP)   did  not  require  an   asset  test.  He                                                                    
suggested that if  only one form could be used  for each, it                                                                    
should be the  simplest one. There might have to  be 2 forms                                                                    
in case  a person  on senior  benefits who  did not  have to                                                                    
perform an asset test did not have to enter certain data.                                                                       
                                                                                                                                
Vice-Chair Gara  did not  think it would  be possible  to do                                                                    
one  application for  every benefit.  Some  Medicaid had  an                                                                    
asset test, and some did not.                                                                                                   
                                                                                                                                
Representative Kawasaki WITHDREW his OBJECTION.                                                                                 
                                                                                                                                
Representative Pruitt OBJECTED for discussion.                                                                                  
                                                                                                                                
Representative  Pruitt highlighted  that  the committee  had                                                                    
never  discussed  Code  for  America.   He  thought  it  was                                                                    
important to  discuss their  security measures,  their track                                                                    
record, and other things. He  wanted to have the information                                                                    
so  that if  something went  wrong, at  least the  committee                                                                    
could say it had vetted the organization.                                                                                       
                                                                                                                                
Vice-Chair  Gara replied  that  Representative Johnston  and                                                                    
the  department were  aware  of Code  for  America and  felt                                                                    
comfortable   with  working   with  the   organization.  The                                                                    
question was whether Code for  America was going to work for                                                                    
the State  of Alaska for free.  He encouraged Representative                                                                    
Pruitt to  write a letter.  He restated that  the department                                                                    
had a meeting with Code for America in April.                                                                                   
                                                                                                                                
Representative Pruitt WITHDREW his OBJECTION.                                                                                   
                                                                                                                                
There being  NO further  OBJECTION, Amendment  H HSS  20 was                                                                    
ADOPTED.                                                                                                                        
                                                                                                                                
Representative Ortiz  asked to move  H HSS  21 and H  HSS 22                                                                    
together.                                                                                                                       
                                                                                                                                
Representative Wilson  did not  believe the  amendments were                                                                    
that similar.                                                                                                                   
                                                                                                                                
4:38: 18 PM                                                                                                                   
                                                                                                                                
Representative  Ortiz  MOVED to  ADOPT  Amendment  H HSS  21                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Senior and Disabilities Services                                                                                           
     Senior and Disabilities Services Administration                                                                            
     H HSS 21                                                                                                                   
     Service Delivery Models                                                                                                    
     Offered by Representative Ortiz                                                                                            
                                                                                                                                
     Wordage:                                                                                                                   
     It  is   the  intent   of  the  legislature   that  the                                                                    
     Department re-examine and  recommend service models for                                                                    
     Alaskan  communities with  a  population  of less  than                                                                    
     50,000  to  meet  the  needs  of  disabled  and  senior                                                                    
     populations in Alaska's smaller communities.                                                                               
                                                                                                                                
     Explanation:                                                                                                               
     Service   delivery   models   that  works   in   larger                                                                    
     communities  do   not  necessarily  work   in  Alaska's                                                                    
     smaller  communities.  It   is  important  to  reassess                                                                    
     service needs and delivery  models to serve individuals                                                                    
     with disabilities in these communities.                                                                                    
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Representative  Ortiz explained  that the  purpose for  both                                                                    
amendments  was that  he heard  that  as DHSS  had seen  cut                                                                    
backs and reductions in support  from the state, it had been                                                                    
forced to  find areas where  reductions could be  made. Many                                                                    
of the programs were tied  to federal funding. The amendment                                                                    
addressed  an area  where  he had  heard  concerns from  his                                                                    
constituents. He  relayed there  had been reductions  in day                                                                    
habilitation services, which had  caused some extreme issues                                                                    
for the  people who had  seen the reductions  in communities                                                                    
like  his own.  He  read  a portion  of  the amendment  (see                                                                    
above).  He   offered  that  the  amendment   spoke  to  the                                                                    
differences   between   rural   communities   versus   urban                                                                    
communities.  The solutions  found by  DHSS might  work well                                                                    
for urban communities but not for rural ones.                                                                                   
                                                                                                                                
Representative   Wilson  asked   for  a   definition  of   a                                                                    
community.  Representative Ortiz  replied  that a  community                                                                    
would be a community with a population of less than 50,000.                                                                     
                                                                                                                                
Representative Wilson indicated that  the City of North Pole                                                                    
was  under 2000  people. The  community of  North Pole  also                                                                    
qualified based  on a population  under 50,000. The  City of                                                                    
Fairbanks  also fell  under the  population mark  of 50,000.                                                                    
Fairbanks  Borough  did not  fall  under  50,000. It  had  a                                                                    
population of  about 100,000. She thought  the definition of                                                                    
a community would make it a major project.                                                                                      
                                                                                                                                
Representative Ortiz  relayed that the figure  of 50,000 was                                                                    
just  an  estimate of  what  would  make a  community  large                                                                    
enough  to receive  such things  as  daycare facilities  for                                                                    
adults.  He encouraged  a friendly  amendment to  change the                                                                    
number.                                                                                                                         
                                                                                                                                
Representative  Wilson   was  worried  about   the  language                                                                    
because she thought it presented  a divide. She relayed that                                                                    
in  Fairbanks,  if  a  person  wanted to  have  a  baby  and                                                                    
intended for  their child  to go  into daycare,  they better                                                                    
get on  a list  first. There were  very few  daycares taking                                                                    
infants  because of  regulations.  She was  unclear about  a                                                                    
service  delivery model.  She was  wondering which  services                                                                    
Representative  Ortiz was  talking  about.  She thought  the                                                                    
amendment would be significantly  expensive depending on how                                                                    
expansive they would make the intent language.                                                                                  
                                                                                                                                
Representative   Ortiz  replied   that  the   amendment  was                                                                    
legislative intent language. He was  unsure if it would have                                                                    
major  ramifications  within  the  department.  Raising  the                                                                    
issue of the difference  between rural communities with less                                                                    
access  to services  and urban  communities.  He wanted  the                                                                    
department to  look at and consider  the issue as a  part of                                                                    
its plan on how to adjust to reductions in funding.                                                                             
                                                                                                                                
Representative  Wilson  commented  that   it  was  not  just                                                                    
intent.   She    spoke   of   intent    language   regarding                                                                    
round-a-bouts  at Chena  Hot  Springs,  which outlined  that                                                                    
state money could  not be spent. As a result  of that intent                                                                    
language,  100  percent  federal funding  was  secured.  She                                                                    
wanted sideboards to the amendment.                                                                                             
                                                                                                                                
4:44:37 PM                                                                                                                    
                                                                                                                                
Representative Pruitt thought the  only community that would                                                                    
not be  looked at was  Anchorage. He conveyed that  based on                                                                    
the definition  Wasilla, Palmer,  and Juneau  would qualify.                                                                    
He  expected   the  departments  to  take   intent  language                                                                    
seriously.  His   concern  was  asking  the   department  to                                                                    
consider  every place  but Anchorage.  He  wanted a  clearer                                                                    
definition.  He  was  concerned  with  the  potential  costs                                                                    
related to the amendment.                                                                                                       
                                                                                                                                
Representative Kawasaki reported that  the City of Fairbanks                                                                    
had  about  35,000  people.  The  borough,  which  exercises                                                                    
health and  social service powers  had a population  of just                                                                    
under  100,000.  He thought  the  committee  was asking  the                                                                    
department  to   recommend  a   service  model   for  Alaska                                                                    
communities.  He  thought  the amendment  could  be  written                                                                    
better.                                                                                                                         
                                                                                                                                
Representative Ortiz asked if  it would please the committee                                                                    
if he lowered the population to less than 20,000.                                                                               
                                                                                                                                
Representative  Wilson provided  feedback.  She thought  the                                                                    
same  issue  would apply.  She  opined  the amendment  would                                                                    
still  apply  to  many communities  which  would  likely  be                                                                    
costly. She  continued that even  off the road  system there                                                                    
would be  several communities the amendment  would apply to.                                                                    
She thought  the task would over-burden  the department. She                                                                    
suggested that the amendment be  rolled to the bottom of the                                                                    
amendments.                                                                                                                     
                                                                                                                                
Representative Ortiz WITHDREW Amendment H HSS 21.                                                                               
                                                                                                                                
4:49:43 PM                                                                                                                    
                                                                                                                                
Representative  Ortiz  MOVED to  ADOPT  Amendment  H HSS  22                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Senior and Disabilities Services                                                                                           
     Senior and Disabilities Services Administration                                                                            
                                                                                                                                
     H HSS 22                                                                                                                   
     Companion Services                                                                                                         
     Offered by Representative Ortiz                                                                                            
                                                                                                                                
     Wordage:                                                                                                                   
     It is the  intent of the legislature that  the State of                                                                    
     Alaska  proceed  expeditiously to  establish  companion                                                                    
     services under  Section 1915(c) of the  Social Security                                                                    
     Act  to compliment  and support  the services  provided                                                                    
     through the Medicare/Medicaid waiver programs.                                                                             
                                                                                                                                
     Explanation:                                                                                                               
     The Department indicates the  process of establishing a                                                                    
     "companion service"  category under Section  1915(c) is                                                                    
     lengthy and  can stretch  from one  to two  years. With                                                                    
     the reduction  in services  under the  Day Habilitation                                                                    
     program  it   is  vital  that  the   State  pursue  the                                                                    
     application   process    aggressively.   Families   and                                                                    
     communities have  been heavily impacted by  the 12 hour                                                                    
     per  week cap  on Day  Habilitation services  and until                                                                    
     companion  services  are  available to  compliment  and                                                                    
     support  Day  Habilitation   services,  these  families                                                                    
     struggle  to   meet  the   needs  of   this  vulnerable                                                                    
     population.                                                                                                                
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Representative  Ortiz read  the  amendment  (see above).  He                                                                    
further explained  that the department was  forced to reduce                                                                    
the amount  of day  habilitation services available  down to                                                                    
12 hours per week for  those who qualified. Originally there                                                                    
had been a soft cap of 18  hours per week. He heard from his                                                                    
constituents  on a  regular basis  about the  impact of  the                                                                    
reduction. He  continued that  when the  change was  made, a                                                                    
soft  cap was  put  into place.  A soft  cap  allowed for  a                                                                    
recipient to  be able to  apply for  a waiver from  the soft                                                                    
caps  when  their  plan  of  service  came  up  for  review.                                                                    
However, over 1,000  plans had been reviewed  and only about                                                                    
5  waivers  had  been  granted. He  thought  what  had  been                                                                    
proposed as a  soft cap turned into a hard  cap. People were                                                                    
left  without access  to service.  The net  effect was  that                                                                    
people with disabilities were forced  to be at home for much                                                                    
longer periods with less access to several things.                                                                              
                                                                                                                                
Representative  Ortiz   continued  that  in   response,  the                                                                    
department  planned  to  replace   or  supplement  with  the                                                                    
companion  services program  requiring less  money per  hour                                                                    
for certain  services. However, he understood  that it would                                                                    
take  more than  2  years to  implement  the companion  care                                                                    
services plan. In the meantime,  there were people caught in                                                                    
the transition  of having to  adjust to the  great reduction                                                                    
in day habilitation services.                                                                                                   
                                                                                                                                
4:52:53 PM                                                                                                                    
                                                                                                                                
Representative  Tilton  understood  from  the  subcommittee,                                                                    
1915(c)  Home  and  Community-Based Services  (HCBS)  Waiver                                                                    
system  would be  going  live  in May.  She  thought he  was                                                                    
asking   that  they   proceed  expeditiously   to  establish                                                                    
services.  However, it  was her  understanding  that it  was                                                                    
happening presently.                                                                                                            
                                                                                                                                
Co-Chair Seaton invited the department to respond.                                                                              
                                                                                                                                
Mr. Sherwood  responded that the department  would likely go                                                                    
online  in May  2018.  The new  1915(c)  waiver would  serve                                                                    
people   with  developmental   disabilities  who   would  be                                                                    
eligible for  day habilitation. However, the  department did                                                                    
not  intend  to offer  companion  services  as part  of  the                                                                    
waiver,  at  least initially.  The  department  went with  a                                                                    
subset of  the services  that were available  to individuals                                                                    
who currently  received another waiver for  individuals with                                                                    
developmental disabilities.                                                                                                     
                                                                                                                                
4:54:28 PM                                                                                                                    
                                                                                                                                
Representative Wilson asked why the  waiver did not apply to                                                                    
the developmentally disabled.                                                                                                   
                                                                                                                                
Mr.  Sherwood answered  that the  individual service  waiver                                                                    
was  developed  as an  outgrowth  of  SB  74 which  had  the                                                                    
department look at  a different option under  federal law to                                                                    
offer home  and community-based  services. The  intention of                                                                    
the  department   was  to  refinance  some   grant  programs                                                                    
including  substantially refinancing  the grant  program for                                                                    
community   developmental   disability  services.   As   the                                                                    
department worked with a consultant  to evaluate the option,                                                                    
the 1915(i)  option, which, unlike  waivers, was more  of an                                                                    
open-ended  entitlement.  The  department  determined  there                                                                    
were substantial  financial risks  associated with  it. Much                                                                    
of  the  refinancing  of developmental  disability  services                                                                    
provided through the grants could  be accomplished by adding                                                                    
a  second  waiver,  the  1915(c)   waiver  for  people  with                                                                    
developmental disabilities  but with a more  limited service                                                                    
package.   It  did   not  include   out-of-home  residential                                                                    
services  such as  group home  habilitation. The  department                                                                    
decided  to  move  forward  with  the  grant  services.  The                                                                    
department did not have a  companion service with any of its                                                                    
current waivers.  The department was looking  at potentially                                                                    
adding  it  to  all  of the  department  waivers.  It  would                                                                    
possibly  replace   more  professional  level   services.  A                                                                    
certain level of support for  individuals would be provided,                                                                    
but not in the case  of habilitation which focused primarily                                                                    
on the acquisition and retention  of life skills. Rather, it                                                                    
would provide a  level of supervision and  support as people                                                                    
moved throughout their lives.  The department was looking to                                                                    
move  forward, but  it would  involve regulations,  amending                                                                    
department  waivers, and  making appropriate  plans to  have                                                                    
controls in place for managing utilization.                                                                                     
                                                                                                                                
Representative Wilson remembered  a prior conversation about                                                                    
each case being looked at  separately because of not wanting                                                                    
to have someone  who was staying in their own  home, go to a                                                                    
full-time  facility.  She   clarified  that  the  department                                                                    
thought the  1915(c) waiver would work  for day habilitation                                                                    
but found  that it would  be better to  pursue developmental                                                                    
individual services. She asked if she was correct.                                                                              
                                                                                                                                
Mr. Sherwood  responded in the  negative. He  clarified that                                                                    
the  original bill  had asked  the department  to look  at a                                                                    
different   option,  the   1915(i)  option   for  home   and                                                                    
community-based  services. It  would have  served people  on                                                                    
developmental disabilities grants  to provide general relief                                                                    
assistance and  some senior grant  programs like  grants for                                                                    
adult daycare.  As the department  looked at the  option, it                                                                    
had less  ability to  focus on  and target  individuals with                                                                    
higher  level needs.  The department  opted  to implement  a                                                                    
second  waiver for  people  with developmental  disabilities                                                                    
that  would   allow  it   to  refinance   the  developmental                                                                    
disability grants program.                                                                                                      
                                                                                                                                
4:59:38 PM                                                                                                                    
                                                                                                                                
Representative Wilson  asked if there was  a savings because                                                                    
of the waiver that could  bring day habilitation services to                                                                    
the level it was prior to reducing it.                                                                                          
                                                                                                                                
Mr.  Sherwood reported  that there  were  savings. By  being                                                                    
able  to   substantially  reduce  the  grant   program,  the                                                                    
department  saved about  $5 million  in general  funds which                                                                    
had already  been reduced from the  budget as part of  SB 74                                                                    
fiscal note  process. The department  would not  have access                                                                    
to that money.                                                                                                                  
                                                                                                                                
Representative Guttenberg mentioned  the department limiting                                                                    
the  hours. He  had  heard from  his  constituents that  the                                                                    
reduction in day  habilitation hours had been  a mistake. He                                                                    
understood that  the department was putting  another program                                                                    
in  place in  the  coming  May. He  wondered  what would  be                                                                    
added.  He also  wondered how  the state  would get  back to                                                                    
where it needed to be.                                                                                                          
                                                                                                                                
Mr. Sherwood responded that the  people who were impacted by                                                                    
the reduction  in hours for  day habilitation  services were                                                                    
not going to be affected by  the new waiver. The people that                                                                    
would be  affected by the  new waiver were  people currently                                                                    
receiving  services   through  a  separate   grant  program.                                                                    
Nothing about  the new  waiver would  impact the  people who                                                                    
had  seen a  reduction in  their day  habilitation services.                                                                    
The department  was looking at  companion services as  a way                                                                    
to  offer a  less  expensive alternative  to providing  some                                                                    
level  of support  but not  the same  level of  habilitative                                                                    
services.  He suggested  that in  the waivers  there were  3                                                                    
types  of  services   individuals  could  receive  including                                                                    
residential  habilitation  where  they receive  services  in                                                                    
their  home; supportive  employment, which  allowed them  to                                                                    
receive  habilitative services  where they  worked; and  day                                                                    
habilitation   where  they   received   services  in   their                                                                    
community.  The  reduction applied  to  one  of these  three                                                                    
options.  It  was a  soft  cap  in  that  there was  not  an                                                                    
absolute hard limit. However, it  was a firmer cap than what                                                                    
people were led to expect.                                                                                                      
                                                                                                                                
Co-Chair Seaton  relayed that  the committee  had additional                                                                    
comments.  Therefore,  he  would  adjourn  the  meeting  and                                                                    
continue  the discussion  on the  amendment during  tomorrow                                                                    
morning's meeting at 8:30 a.m.                                                                                                  
                                                                                                                                
HB  285  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HB  286  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
5:03:53 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 5:03 p.m.                                                                                          

Document Name Date/Time Subjects
HB 286 DOA Public Defender Letter to HFIN - flattened.pdf HFIN 3/6/2018 1:00:00 PM
HB 286
HB 286 HB 285 Amendments with Actions as of 3-6-18.pdf HFIN 3/6/2018 1:00:00 PM
HB 285
HB 286