Legislature(2019 - 2020)ADAMS 519

02/26/2020 09:00 AM FINANCE

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Audio Topic
09:13:41 AM Start
09:14:34 AM HB205 || HB206
09:15:00 AM Amendments
10:22:46 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 26, 2020                                                                                          
                         9:13 a.m.                                                                                              
9:13:41 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Foster called the House Finance Committee meeting                                                                      
to order at 9:13 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Jennifer Johnston, Co-Chair                                                                                      
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative Andy Josephson                                                                                                   
Representative Gary Knopp                                                                                                       
Representative Bart LeBon                                                                                                       
Representative Kelly Merrick                                                                                                    
Representative Colleen Sullivan-Leonard                                                                                         
Representative Cathy Tilton                                                                                                     
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Alexei Painter, Analyst, Legislative Finance Division;                                                                          
Kelly Cunningham, Analyst, Legislative Finance Division.                                                                        
HB 205      APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                
            HB 205 was HEARD and HELD in committee for                                                                          
            further consideration.                                                                                              
HB 206      APPROP: MENTAL HEALTH BUDGET                                                                                        
            HB 206 was HEARD and HELD in committee for                                                                          
            further consideration.                                                                                              
Co-Chair Foster reviewed the meeting agenda. The committee                                                                      
would resume its amendment process from the previous day.                                                                       
HOUSE BILL NO. 205                                                                                                            
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain    programs;    capitalizing   funds;    making                                                                    
     appropriations under art.  IX, sec. 17(c), Constitution                                                                    
     of the State of  Alaska, from the constitutional budget                                                                    
    reserve fund; and providing for an effective date."                                                                         
HOUSE BILL NO. 206                                                                                                            
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
9:14:34 AM                                                                                                                    
9:15:00 AM                                                                                                                    
AT EASE                                                                                                                         
9:15:13 AM                                                                                                                    
Representative Merrick MOVED to ADOPT Amendment H DEC 1                                                                         
(copy on file):                                                                                                                 
     Spill Prevention and Response                                                                                              
     H DEC  1 - Reduce  Staffing Levels and  Eliminate Class                                                                    
     II Facilities Unit to Avoid Revenue Shortfall                                                                              
     Offered by Representative Merrick                                                                                          
     1002 Fed Rcpts (Fed) -375.6                                                                                                
     1052 Oil/Haz Fd (DGF) -643.5                                                                                               
Co-Chair Johnston OBJECTED for discussion.                                                                                      
Representative  Merrick explained  that the  amendment would                                                                    
reduce  funding  a  portion  of  the  Spill  Prevention  and                                                                    
Response   (SPAR)  program.   The   reduction  would   align                                                                    
expenditures with  anticipated revenues  to avoid  a funding                                                                    
shortfall. She offered  that with a decline  in oil revenue,                                                                    
the  expenses  had been  maintained  but  revenues had  gone                                                                    
down. The program  was looking at a shortfall in  FY 24. The                                                                    
amendment  would help  close the  gap. However,  there would                                                                    
still be a shortfall in funding  of $70,000 in FY 24. If the                                                                    
amendment did  not pass, the anticipated  shortfall would be                                                                    
about  $700,000.  The  governor had  offered  the  amendment                                                                    
during   subcommittee,  but   it   was   not  given   proper                                                                    
consideration  because it  was  not a  long-term fix.  There                                                                    
were members in  the other body that were working  on a more                                                                    
permanent fix.  The amendment  would provide  the department                                                                    
some  time until  the long-term  fix could  be applied.  She                                                                    
spoke  with the  commissioner  who  indicated the  amendment                                                                    
would lead  to a  reduction of  7 positions.  She elaborated                                                                    
that  4 of  the positions  were unfilled  while 2  positions                                                                    
were  vacant  because the  employees  had  taken other  jobs                                                                    
within the  department. One person had  been offered another                                                                    
position but had not accepted it yet.                                                                                           
Representative Josephson opposed  the amendment. He detailed                                                                    
that the state would  lose approximately $400,000 in federal                                                                    
receipts  if  the  amendment   was  adopted.  The  amendment                                                                    
imposed a  burden on undesignated  general funds  (UGF). The                                                                    
amendment  would eliminate  the state  oversight of  storage                                                                    
facilities that  housed between  1,000 and  420,000 gallons.                                                                    
He continued  that relatively to the  funding shortfall, his                                                                    
report  showed that  the  fund  would run  out  of money  in                                                                    
FY 25. He had been told  of one approach under consideration                                                                    
in  the Senate  which contained  a possible  fix. The  total                                                                    
shortfall, which  would eliminate the funding  source, would                                                                    
not occur  for 4 to 5  calendar years. He was  concerned the                                                                    
amendment  was  a  penny-wise,  pound-foolish  approach.  He                                                                    
would  be  opposing  the  amendment.  He  thought  necessary                                                                    
oversight of the class II  facilities, the tank farms, was a                                                                    
good reason to reject the amendment.                                                                                            
9:19:01 AM                                                                                                                    
Representative Merrick  provided wrap  up on  the amendment.                                                                    
She commented  that although  she appreciated  comments made                                                                    
by  Representative Josephson,  she  did not  agree with  his                                                                    
math. She had been assured  by the commissioner that the job                                                                    
would  be  done  and  the  department  would  absorb  the  7                                                                    
positions. The amendment was necessary  in order to keep the                                                                    
department going.                                                                                                               
Representative  Knopp  was  concerned   about  the  loss  of                                                                    
revenue  if it  was a  result of  a loss  of production  per                                                                    
barrel receipts.  He did not  agree with the idea  of losing                                                                    
$400,000  in federal  receipts. He  asked if  the state  was                                                                    
anticipating  a  decline  in  federal  receipts.  He  needed                                                                    
further detail.                                                                                                                 
Co-Chair Foster invited Representative Merrick to comment.                                                                      
Representative  Merrick would  wait  until another  question                                                                    
was presented.                                                                                                                  
Vice-Chair    Ortiz   shared    Representative   Josephson's                                                                    
concerns.  He stated  that  if the  amendment  saved UGF  he                                                                    
would  take a  strong  look at  supporting  it. However,  he                                                                    
expressed concerns about losing  federal receipts. There had                                                                    
already been  a 12  percent decrease  in staffing  in recent                                                                    
years  within  SPAR.  He  also  noted  that  SPAR  had  been                                                                    
challenged  with a  30 percent  turnover rate  in the  prior                                                                    
year.  He thought  the amendment  would  handcuff SPAR  with                                                                    
further reductions in federal receipts.                                                                                         
9:22:02 AM                                                                                                                    
Co-Chair Foster  asked to hear from  the Legislative Finance                                                                    
Division (LFD).                                                                                                                 
ALEXEI  PAINTER,  ANALYST,   LEGISLATIVE  FINANCE  DIVISION,                                                                    
addressed Representative Knopp's  question about the revenue                                                                    
shortfall. He  relayed that  the revenue  for the  fund came                                                                    
from a  tax on oil  production and  a tax on  refined fuels.                                                                    
Oil  production  was  declining  and  so  was  refined  fuel                                                                    
consumption.   Both    revenue   sources    were   declining                                                                    
simultaneously creating a  hole in the fund.  The balance of                                                                    
the fund  would fall below  zero by the  end of FY  24 which                                                                    
included  the  reductions  in  the  amendment.  Without  the                                                                    
reduction, the fund would run out earlier in FY 24.                                                                             
Representative  Knopp  thought  it  made sense  to  lay  off                                                                    
employees if the  funding ran out. He thought  it seemed odd                                                                    
for the  state to give up  $400,000 when the issue  could be                                                                    
managed in the future in other ways.                                                                                            
Mr. Painter  replied that the  reduction was  chosen because                                                                    
the  positions   performed  non-regulatory   functions.  The                                                                    
Environmental  Protection Agency  (EPA) retained  regulation                                                                    
of the fuel  tanks. Whereas, there were  other activities in                                                                    
which  the EPA  was the  regulator. In  the particular  area                                                                    
they were not the regulator.                                                                                                    
Representative Merrick  thought it was important  to do what                                                                    
the department was  asking. It would help  while a long-term                                                                    
fix was being crafted.                                                                                                          
Co-Chair Johnston MAINTAINED her OBJECTION.                                                                                     
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Carpenter, Merrick, Sullivan-Leonard, Tilton                                                                          
OPPOSED:  Wool,  Josephson,  Knopp,  LeBon,  Ortiz,  Foster,                                                                    
The MOTION to adopt Amendment H DEC 1 FAILED (4/7).                                                                             
9:25:19 AM                                                                                                                    
Representative  Merrick MOVED  to  ADOPT Amendment  H DEC  2                                                                    
(copy on file):                                                                                                                 
     H DEC 2 - Delete Ocean Ranger Program                                                                                      
     Offered by Representative Merrick                                                                                          
     1205 Ocn Ranger (Other) -3,426.0                                                                                           
Representative Josephson objected for discussion.                                                                               
Representative   Merrick  explained   the  amendment   would                                                                    
eliminate the Ocean Ranger Program.  The program was created                                                                    
by  a  ballot  initiative  in  2006  and  was  funded  by  a                                                                    
statutory  $4  per berth  fee  on  all commercial  passenger                                                                    
vessels  with  250  berths  or   more.  She  suggested  that                                                                    
eliminating the  program would not have  significant impacts                                                                    
on the regulation of cruise  ships on Alaskan waters because                                                                    
DEC  would continue  to permit  and  monitor for  compliance                                                                    
with  state   waste  water  and  air   quality  permits  and                                                                    
regulations  through  records reviews,  import  inspections,                                                                    
opacity monitoring,  and vessel  tracking. The  Ocean Ranger                                                                    
Program  was provided  through  a contract.  Out  of the  22                                                                    
Ocean  Rangers,  only 3  or  4  of  them were  residents  of                                                                    
Alaska. The department  was currently working on  a piece of                                                                    
legislation  which was  in committee.  There  had been  some                                                                    
good  committee hearings  to revamp  the  program making  it                                                                    
more effective  and making  better use  of the  dollars paid                                                                    
for by cruise ships.                                                                                                            
Vice-Chair  Ortiz spoke  against the  amendment. He  relayed                                                                    
that the subcommittee had considered  the cut and had chosen                                                                    
to  reject it.  He agreed  that the  department was  putting                                                                    
forward some plans that might  show there would no longer be                                                                    
a need to  continue the program in the future.  He had heard                                                                    
loud and  clear from  coastal constituents that  they wanted                                                                    
the  program to  continue  until a  more robust  replacement                                                                    
came about. Until that time,  the continuance of the program                                                                    
was  in  the   best  interest  of  the   state  and  coastal                                                                    
Representative  Sullivan-Leonard asked  for  an overview  of                                                                    
the  Ocean Ranger  Program. It  was her  understanding there                                                                    
were  employees on  cruise ships  monitoring  the waste  and                                                                    
disposal  systems.  If  Ocean  Rangers  were  no  longer  on                                                                    
vessels, she asked what DEC had planned for oversight.                                                                          
Representative  Merrick  responded  that there  were  people                                                                    
onboard   ships   from   the   department   that   conducted                                                                    
monitoring. It  was her understanding that  the Ocean Ranger                                                                    
followed that person around. The  program had the reputation                                                                    
of  being  ineffective. She  attested,  having  grown up  in                                                                    
Southeast  Alaska, that  the health  and safety  of Alaska's                                                                    
waters were  very important to  her. She believed  the state                                                                    
needed to  be a good  steward of  others' money as  well and                                                                    
put  the funding  to  better use  through  a more  effective                                                                    
Representative Sullivan-Leonard  highlighted that  there was                                                                    
already  oversight   in  place,  meaning  the   program  was                                                                    
unnecessary. She asked if she was correct.                                                                                      
9:30:42 AM                                                                                                                    
Representative Merrick answered in  the affirmative based on                                                                    
her understanding.                                                                                                              
Vice-Chair Ortiz did  not know what kind  of oversight there                                                                    
would  be in  absence of  the program.  He did  not know  of                                                                    
anyone  else conducting  oversight. There  was potential  in                                                                    
the  long-term for  electronic monitoring  of discharge  and                                                                    
similar items,  but it was not  in place yet. The  idea that                                                                    
an  Ocean Ranger  followed someone  around was  something he                                                                    
had  never heard.  He  pointed to  the  Coronavirus and  the                                                                    
worldwide  issue taking  place related  to cruise  ships. He                                                                    
spoke  about  other items  monitored  by  the Ocean  Rangers                                                                    
including food.  He remarked that  the rangers would  not be                                                                    
able to test  for the virus, but they could  alert others to                                                                    
the  potential hazard.  He thought  the  elimination of  the                                                                    
program was premature.                                                                                                          
Representative  Sullivan-Leonard did  not  believe an  Ocean                                                                    
Ranger  had oversight  related  to any  illness  on board  -                                                                    
there  were medical  personnel onboard  the  ships for  that                                                                    
purpose. She  agreed that there  was validity in  not having                                                                    
an  Ocean Ranger  onboard a  vessel, particularly  on cruise                                                                    
ships. She agreed with  Representative Merrick and supported                                                                    
the amendment.                                                                                                                  
Representative  Knopp  remarked  that  the  issue  had  been                                                                    
discussed in  committee the previous year.  He had supported                                                                    
its elimination the  previous year, but the  funding had not                                                                    
been  eliminated.  He would  not  support  the amendment  at                                                                    
present. He hoped  legislation would be passed  to cover the                                                                    
issue. He agreed  with Representative Sullivan-Leonard about                                                                    
the  expansion of  duties of  an Ocean  Ranger and  how they                                                                    
were outside of the intention  of the program. He reiterated                                                                    
his lack of support for the amendment.                                                                                          
9:35:47 AM                                                                                                                    
Representative   Josephson  discussed   that  a   number  of                                                                    
legislators had  experiences that made them  wonder what was                                                                    
really taking place  in the departments. He  added that some                                                                    
had the  mantra "comply with  the law." He pointed  out that                                                                    
the  program  followed  a citizen-made  law  that  he  would                                                                    
comply  with.  His  understanding  was  the  fees  had  been                                                                    
collected and the  department was using them  for some other                                                                    
DEC regulatory  purpose rather than their  intended purpose.                                                                    
He  asked   why  the  legislature  would   delete  fees  the                                                                    
department was  using in some  manner. He asked  for further                                                                    
Vice-Chair Ortiz  believed the amendment would  not stop the                                                                    
fee collection  in any  way. The program  was funded  by the                                                                    
fees from passengers - the money was not UGF.                                                                                   
9:38:16 AM                                                                                                                    
AT EASE                                                                                                                         
9:42:31 AM                                                                                                                    
Representative  LeBon  asked   for  clarification  that  the                                                                    
action  taken  by  the legislature  the  previous  year  had                                                                    
eliminated the program, but the  funding had continued to go                                                                    
to the department.                                                                                                              
Vice-Chair  Ortiz answered  that Ocean  Rangers had  been on                                                                    
ships  in   the  past  summer.   The  legislature   had  not                                                                    
eliminated  the program,  but the  governor vetoed  money to                                                                    
eliminate the  program. Due to  the governor's  action there                                                                    
would  not  be  a  program  in the  coming  summer.  If  the                                                                    
legislature continued  with the actions of  the subcommittee                                                                    
the program would be reinstituted the following summer.                                                                         
Representative LeBon asked if  the amendment would eliminate                                                                    
the program but not the funding.                                                                                                
Vice-Chair  Ortiz replied  in the  affirmative. The  funding                                                                    
mechanism stayed the same.                                                                                                      
Representative  Wool  asked  if   the  money  was  collected                                                                    
specifically  for the  Ocean Ranger  Program  or whether  it                                                                    
could be used for other items.  He asked if they would be in                                                                    
violation if the funds continued.                                                                                               
Co-Chair Foster asked to hear from LFD.                                                                                         
Mr.  Painter answered  that the  statute specified  that the                                                                    
Ocean Ranger  fee of  $4 could  be spent  only on  the Ocean                                                                    
Ranger Program.  Federal law was  looser, but the  funds had                                                                    
to be spent on something similar related to vessels.                                                                            
Representative  Wool suggested  that  if  someone wanted  to                                                                    
eliminate the  Ocean Ranger  Program, the  $4 fee  should be                                                                    
eliminated also.                                                                                                                
9:46:27 AM                                                                                                                    
Representative  Josephson asked  for  verification that  the                                                                    
amendment  would not  delete the  program because  it was  a                                                                    
statutory program.                                                                                                              
Mr.  Painter  agreed  that statutes  could  not  be  deleted                                                                    
through the budget; they could only be defunded.                                                                                
Representative Merrick  provided wrap  up on  the amendment.                                                                    
She believed the program was  ineffective. She was confident                                                                    
the department  would come up with  a better way to  use the                                                                    
Co-Chair Johnston MAINTAINED her OBJECTION.                                                                                     
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Carpenter, Merrick, Sullivan-Leonard, Tilton                                                                          
OPPOSED:  Josephson,  Knopp,  LeBon,  Ortiz,  Wool,  Foster,                                                                    
The MOTION to adopt Amendment H DEC 2 FAILED (4/7).                                                                             
9:48:20 AM                                                                                                                    
Representative Josephson  MOVED to  ADOPT Amendment H  DFG 1                                                                    
(copy on file).                                                                                                                 
     H DFG 1 - Restore Division Director                                                                                        
     Offered by Representative Josephson                                                                                        
     1004 Gen Fund (UGF) 202.7                                                                                                  
Co-Chair Johnston OBJECTED for discussion.                                                                                      
Representative  Josephson explained  that the  amendment and                                                                    
the   amendment  that   followed   would  restore   division                                                                    
directors in the Habitat  Division. The subsequent amendment                                                                    
would restore  the position in the  Subsistence Division. He                                                                    
believed  that  the  responsibilities  of  the  Habitat  and                                                                    
Subsistence Programs  were critical enough to  Alaskans that                                                                    
they required  the focus  of a  director that  could provide                                                                    
rather  than   compete  for  the   attention  of   the  busy                                                                    
department's  deputy commissioner  to whom  the section  now                                                                    
reported   to   as   shown   in   the   division's   current                                                                    
organizational chart.  He submitted  the amendments  only to                                                                    
highlight  the  issue. He  had  intended  to bring  them  to                                                                    
disposition.  However, he  erroneously believed  the dollars                                                                    
still existed  in the department  even though they  had been                                                                    
cut. He withdrew the amendments.                                                                                                
Representative Josephson  WITHDREW Amendments H DFG  1 and H                                                                    
DFG 2 (copy on file).                                                                                                           
     State Subsistence Research & Monitoring                                                                                    
     H DFG 2 - Restore division director position                                                                               
     Offered by Representative Josephson                                                                                        
     1004 Gen Fund (UGF) 195.6                                                                                                  
9:50:11 AM                                                                                                                    
Co-Chair Johnston MOVED to ADOPT  Amendment H GOV 1 (copy on                                                                    
     Office of Management and Budget                                                                                            
     H GOV 1 - Restorative Justice Account Report Wordage                                                                       
     Offered by Representative Johnston                                                                                         
Co-Chair Foster OBJECTED for discussion.                                                                                        
Co-Chair  Johnston explained  the  amendment. She  indicated                                                                    
the  account was  established  in 2018  for  the purpose  of                                                                    
assisting  and  paying  victims' restitution  and  restoring                                                                    
them  to   wholeness.  Unfortunately,  one  year   into  the                                                                    
creation   of   the   account,  the   funds   were   already                                                                    
insufficient to cover costs. The  shortfall in funds was due                                                                    
to  low  offender  counts  in   2019.  In  the  future,  the                                                                    
legislature  wanted  the  Office of  Management  and  Budget                                                                    
(OMB) to track  the funds in the account. The  intent of the                                                                    
amendment was  to ask OMB to  report back on the  use of the                                                                    
remaining  funds and  to let  the legislature  know what  is                                                                    
intended for the future of the account.                                                                                         
Representative  Sullivan-Leonard  asked  if there  were  any                                                                    
funds in the account.                                                                                                           
Co-Chair Johnston replied  that there was a  small amount in                                                                    
the fund. She indicated  that the Legislative Affairs Agency                                                                    
brought the issue to her  attention. Also, the author of the                                                                    
bill in 2018 was looking to put a light on the situation.                                                                       
Co-Chair Foster WITHDREW his OBJECTION.                                                                                         
There being NO OBJECTION, Amendment H GOV 1 was ADOPTED.                                                                        
9:51:51 AM                                                                                                                    
Representative Josephson  MOVED to  ADOPT Amendment H  HSS 1                                                                    
(copy on file):                                                                                                                 
     Behavioral Health                                                                                                          
     H HSS 1 - Restore Funding Removed in FY20                                                                                  
     Offered by Representative Josephson                                                                                        
     1037 GF/MH (UGF) 6,000.0                                                                                                   
Co-Chair Johnston OBJECTED for discussion.                                                                                      
Representative   Josephson  explained   how  the   amendment                                                                    
evolved.   He    relayed   that   the    behavioral   health                                                                    
appropriation had  been reduced over the  previous couple of                                                                    
years. He  found the  funding to  be important.  He reminded                                                                    
the committee  that the legislature  had specified in  HB 39                                                                    
[the  FY  20  operating  budget  bill  passed  in  2019]  an                                                                    
appropriation  of  $6  million,   albeit  with  a  different                                                                    
funding  source. He  continued  that it  was  vetoed by  the                                                                    
governor on  June 28,  2019. In  July 2019,  the legislature                                                                    
reinserted the $6 million through  HB 2001 [An appropriation                                                                    
bill passed  in 2019]. His  staff reviewed the FY  20 budget                                                                    
to  determine all  of the  items that  had been  vetoed. The                                                                    
public cared significantly about  what had been vetoed which                                                                    
he  believed was  the reason  the governor  did not  veto as                                                                    
much in August [2019].                                                                                                          
Representative  Josephson  continued  that it  was  positive                                                                    
that  through SB  74 [Legislation  passed in  2016 regarding                                                                    
Medicaid reform]  the state  was transitioning  with federal                                                                    
government 1115  waivers to fund programs.  He learned, from                                                                    
speaking  with the  Alaska State  Hospital and  Nursing Home                                                                    
Association (ASHNHA)  and others,  that there were  gaps. He                                                                    
discovered  that  the  waiver  for substance  abuse  was  in                                                                    
place.  However,  it was  not  the  case for  mental  health                                                                    
treatment   it  would take affect July 1.  He suggested that                                                                    
even if  there were  systems built  out to  capture Medicaid                                                                    
money, there  were several  providers who  could not  do so.                                                                    
Part  of  the  issue  was  that not  all  programs  fit  the                                                                    
criteria for  the 1115 waiver. He  referenced Nugent's Ranch                                                                    
in the Mat-Su. If a facility  had more than 16 beds, such as                                                                    
Nugent's Ranch,  they did not  get an IMD  [Institutions for                                                                    
Mental Diseases] exclusion. Therefore,  they did not qualify                                                                    
for all  of the  waiver. In  addition, the  Medicaid Program                                                                    
had a  limit of  30 days    in some  cases expandable  to 60                                                                    
days. Nugent's  Ranch had individuals recovering  who needed                                                                    
a stay in duration of up  to two years. He noted that Alaska                                                                    
Youth and Family  Network did not fit into  the Medicaid box                                                                    
either. He  provided information about the  program. Another                                                                    
program,  Set  Free Alaska,  did  not  qualify. The  program                                                                    
wanted  to  convert to  billing  Medicaid.  However, it  was                                                                    
complicated   moving  from   State   resources  to   federal                                                                    
Representative Josephson cited a  letter from Tom Chard, CEO                                                                    
of the Alaska Behavioral  Health Association. Mr. Chard made                                                                    
a strong  argument confirming the issues  the representative                                                                    
had mentioned.  He conveyed that Medicaid  did not reimburse                                                                    
grants  for  the  services  the  program  provided.  In  his                                                                    
letter, Mr.  Chard listed 18 different  services provided by                                                                    
the  mental  health  community centers.  The  programs  were                                                                    
inexpensive  compared to  showing up  at the  emergency room                                                                    
and Alaska  Psychiatric Institute (API). He  appreciated the                                                                    
work of  the subcommittee. He offered  the amendment because                                                                    
he wanted further discussion on behavioral health grants.                                                                       
9:59:37 AM                                                                                                                    
AT EASE                                                                                                                         
10:01:36 AM                                                                                                                   
Co-Chair  Johnston  appreciated  Representative  Josephson's                                                                    
comments and  his thorough research  on the  topic. However,                                                                    
the subcommittee had  come up with funding of  a little over                                                                    
$18  million for  the grants.  She agreed  that the  waivers                                                                    
were coming  out in steps.  She had significant  respect for                                                                    
the  department  staff  working   long  and  hard  hours  to                                                                    
establish  the 1115  waivers. She  discussed that  it was  a                                                                    
year  of transformation  from a  grant system  to a  billing                                                                    
system within the department. The  subcommittee had tried to                                                                    
address the  organizations that would  not be able  to adapt                                                                    
to the billing system.  She had concerns about appropriating                                                                    
an additional  $6 million because  she did not know  how the                                                                    
department  would  deal  with it.  She  would  maintain  the                                                                    
subcommittee's   approach  and   would   vote  against   the                                                                    
Representative  LeBon supported  the amendment.  He provided                                                                    
detail.  He discussed  a facility  in his  district, Family-                                                                    
Centered  Services of  Alaska  (FCSA), providing  behavioral                                                                    
health services to children, adults, and families. The non-                                                                     
profit was founded in Fairbanks  in 1989. The entity started                                                                    
providing services  in the  Mat-Su Valley  in 2009  to allow                                                                    
for  a large  number of  children from  the Valley  going to                                                                    
Fairbanks to  receive services in  their home  community. He                                                                    
reported that FCSA currently  operated 14 distinct treatment                                                                    
programs  for children  and young  adults. Programs  covered                                                                    
the complete spectrum of treatment from outpatient to long-                                                                     
term  residential   including  day   treatment,  therapeutic                                                                    
foster  care, group  homes, and  other types  of treatments.                                                                    
Family-Centered  Services  of  Alaska provided  services  to                                                                    
approximately 200  children and families daily  with a total                                                                    
of  400 annually.  The entity  owned  and provided  services                                                                    
from 20  facilities. He reported  that 14 of  the facilities                                                                    
were  in Fairbanks  and 6  were  in the  Mat-Su Valley.  The                                                                    
entity designated  and constructed  19 of the  20 facilities                                                                    
to  provide  services to  meet  the  specific needs  of  the                                                                    
clients it served.  The mission of FCSA was  to serve Alaska                                                                    
by  providing   family  and  child-centered   services  with                                                                    
unconditional  care.  He  thought the  amendment  was  worth                                                                    
supporting and appreciated the maker bringing it forward.                                                                       
10:06:15 AM                                                                                                                   
Representative Wool  shared that he  had met with  his local                                                                    
hospital group  the previous evening. Behavioral  Health had                                                                    
come up as  a topic of discussion. He had  heard there was a                                                                    
large gap in most communities.  Much of the time people were                                                                    
taken to the emergency  room, treated, and discharged. There                                                                    
was a  gap in  what was  available to  individuals following                                                                    
their hospital stay. Often individuals  ended up back in the                                                                    
emergency  room or  in jail.  There was  a gap  in treatment                                                                    
and, the state needed  intermediary facilities including day                                                                    
clinics, group  homes, and places  where people  have access                                                                    
to  supervised treatment  other than  the ER,  hospitals, or                                                                    
jail. He  supported the amendment. He  asserted that prisons                                                                    
should not be the first stop for folks.                                                                                         
Representative Sullivan-Leonard asked to  hear from LFD. She                                                                    
pointed to  page 16 of  the budget  bill. She looked  at the                                                                    
amount  already   in  the  budget  of   $12.8  million.  The                                                                    
amendment showed an increase of  $6 million. She asked for a                                                                    
history  regarding the  behavioral  health  grant in  recent                                                                    
years. She wondered if there had been major reductions.                                                                         
KELLY  CUNNINGHAM,  ANALYST, LEGISLATIVE  FINANCE  DIVISION,                                                                    
answered that  the behavioral health treatment  and recovery                                                                    
grants allocation  had approximately $40 million  in general                                                                    
funds (GF). The  amount was previously $18  million UGF. The                                                                    
subcommittee did  a fund change reflecting  $12 million UGF.                                                                    
The total GF, including  designated general funds (DGF), was                                                                    
about $40  million. There was  about $11 million  in federal                                                                    
dollars. In the  prior year the reduction  to the allocation                                                                    
was  $12.2 million UGF.  The  legislature  adopted about  $6                                                                    
million of  the fund  change and,  the governor  vetoed $6.1                                                                    
million. She  confirmed that the  program had  experienced a                                                                    
reduction from the previous year to the current year.                                                                           
Representative  Sullivan-Leonard  asked   about  the  grants                                                                    
currently  being  disbursed. She  wondered  if  some of  the                                                                    
groups   Representative  Josephson   highlighted  were   not                                                                    
receiving   grants  presently.   She  queried   whether  the                                                                    
amendment  figure would  be in  addition  to the  behavioral                                                                    
health grant.                                                                                                                   
10:10:34 AM                                                                                                                   
Ms. Cunningham responded  that her question was  not easy to                                                                    
answer. She explained  that the grantees of  the 1115 waiver                                                                    
could  begin the  transition  of  billing through  Medicaid.                                                                    
However, not  all of the  grantees had  been able to  do so.                                                                    
She  explained that  the  mental health  piece  of the  1115                                                                    
waiver had  not come online  yet -  it would occur  in July.                                                                    
Some uncertainty  existed. The movement  was to get  most of                                                                    
the  grantees transferred  to  the  Medicaid side.  However,                                                                    
there were some grantees that  could not make the transition                                                                    
as smoothly.                                                                                                                    
Representative  Sullivan-Leonard  asked   if  some  programs                                                                    
would  fall  through the  cracks.  She  referenced Set  Free                                                                    
Alaska  and wondered  if the  program would  not be  able to                                                                    
provide  services  to  their patients  in  the  current  and                                                                    
following  year  waiting  for the  transition  to  the  1115                                                                    
waiver program.                                                                                                                 
Ms.  Cunningham  replied there  was  grant  money going  out                                                                    
presently.  If a  recipient  was receiving  a  grant in  the                                                                    
current year,  she was  uncertain what  would happen  in the                                                                    
following year.                                                                                                                 
Representative  Tilton understood  the  need for  behavioral                                                                    
health  services,  but  grants   had  been  challenging  for                                                                    
several  years. She  wanted  to be  sure  that dollars  were                                                                    
getting to  individuals. She thought  the state  was looking                                                                    
at a transformation  to move away from the  grant process to                                                                    
a  more  streamlined  process.  Making  such  a  change  was                                                                    
difficult.  Some  people  might accept  change  easier  than                                                                    
others.  She   indicated  that  there  were   still  dollars                                                                    
available  for  those  individuals  who  were  in  need  and                                                                    
waiting for  the change  to occur.  She suggested  the state                                                                    
would  have better  controls  in place  to  ensure that  the                                                                    
dollars reached  clients. She would be  supporting the chair                                                                    
of the DHSS subcommittee in opposition of the amendment.                                                                        
10:14:02 AM                                                                                                                   
Representative   LeBon  wondered   if   the  House   Finance                                                                    
Committee  had discussed  the 1115  waiver  in the  previous                                                                    
year. He asked if the  legislature could anticipate a ruling                                                                    
by the  first of the  coming fiscal year. He  wondered about                                                                    
the financial consequences of passing  the amendment and the                                                                    
waiver coming through.                                                                                                          
Ms.  Cunningham responded  that  the  1115 waiver  substance                                                                    
abuse portion was  online. The mental health  portion of the                                                                    
1115 waiver  was scheduled  to come online  July 1.  She was                                                                    
uncertain if the money would  lapse or if providers would be                                                                    
able  to transfer  to Medicaid.  The question  was currently                                                                    
impossible to answer.                                                                                                           
Representative LeBon  appreciated the  response. He  did not                                                                    
see the  amendment causing any  damage if the  worst outcome                                                                    
was that the money lapsed.                                                                                                      
Co-Chair  Johnston  spoke  of  the  difference  between  the                                                                    
current year  and the prior  year. In the previous  year the                                                                    
1115 waiver  was approved.  In the  current year  the waiver                                                                    
was being  implemented through an  approval process.  In the                                                                    
prior  year the  state  was waiting  for  approval from  the                                                                    
federal government.                                                                                                             
Representative LeBon  wondered if,  effective July  1, 2020,                                                                    
the funding in the amount of  $6 million would be handled by                                                                    
the 1115 waiver.                                                                                                                
Co-Chair  Johnston  replied  there  was  a  transition  from                                                                    
billing to grants.  There were entities that  would never be                                                                    
able  to bill  Medicaid  because there  were more  community                                                                    
services. The  state was in  a transition between  a billing                                                                    
system and a grant program.                                                                                                     
10:16:48 AM                                                                                                                   
Representative  Wool asked  for the  UGF funding  amounts of                                                                    
the program for the previous 4 or 5 years.                                                                                      
Ms. Cunningham answered that she  had actuals from FY 15 for                                                                    
the whole  program. She  did not have  the funds  split. She                                                                    
began with  FY 15 in the  amount of $62.7 million;  FY 16 in                                                                    
the amount  of $63.2 million; FY  17 in the amount  of $58.6                                                                    
million; FY 18 in the amount  of $54.7 million; and FY 19 in                                                                    
the amount of $61.2 million.                                                                                                    
Representative  Wool  clarified   that  Ms.  Cunningham  had                                                                    
supplied combined totals of UGF and DGF.                                                                                        
Ms.  Cunningham  replied  that   the  totals  also  included                                                                    
federal dollars.                                                                                                                
Representative Wool asked for the total in FY 20.                                                                               
Ms. Cunningham  relayed that the  total for FY 20  was $51.7                                                                    
million. She indicated  that about $40 million  of the total                                                                    
were GF and about $11 million were federal funds.                                                                               
Representative  Wool  wondered  if the  ratios  were  fairly                                                                    
consistent in previous years.                                                                                                   
Ms. Cunningham would have to follow up.                                                                                         
Representative Wool asked for the total in FY 21.                                                                               
Ms. Cunningham replied $51 million  - $40 million GF and $11                                                                    
million in  federal funds. There  was an $11.4  million fund                                                                    
change in  the governor's  budget changing the  funding from                                                                    
UGF to DGF. However, the  general fund amount of $40 million                                                                    
did  not change.  The amendment  would increase  the general                                                                    
fund amount to $46 million.                                                                                                     
Representative  Wool asked  if there  was a  history of  the                                                                    
amount the 1115  waiver was bringing in.  He suggested there                                                                    
would not be a historical amount, as it was new to Alaska.                                                                      
Ms. Cunningham concurred.                                                                                                       
Co-Chair Johnston MAINTAINED her OBJECTION.                                                                                     
10:20:00 AM                                                                                                                   
Representative  Josephson forgot  to  mention that  Medicaid                                                                    
covered  the  poorest  population. He  understood  that  the                                                                    
amendment  would allow  eligibility for  folks that  did not                                                                    
qualify  for Medicaid.  There were  some programs  that were                                                                    
Alaska tailored  that would never fit  in a square peg  or a                                                                    
round  hole, yet  they had  remarkable  success. There  were                                                                    
programs that  could not  be constrained  by Medicaid  to be                                                                    
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Josephson, LeBon, Ortiz, Wool, Foster                                                                                 
OPPOSED:    Knopp,   Merrick,    Sullivan-Leonard,   Tilton,                                                                    
Carpenter, Johnston                                                                                                             
The MOTION to adopt Amendment H HSS 1 FAILED (5/6).                                                                             
10:22:03 AM                                                                                                                   
AT EASE                                                                                                                         
10:22:26 AM                                                                                                                   
HB 205 was HEARD and HELD in committee for further                                                                              
HB 206 was HEARD and HELD in committee for further                                                                              
Co-Chair Foster reviewed the schedule for the afternoon                                                                         
10:22:46 AM                                                                                                                   
The meeting was adjourned at 10:22 a.m.                                                                                         

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