SENATE FINANCE COMMITTEE March 26, 2010 9:09 a.m. 9:09:59 AM CALL TO ORDER Co-Chair Hoffman called the Senate Finance Committee meeting to order at 9:09 a.m. MEMBERS PRESENT Senator Lyman Hoffman, Co-Chair Senator Bert Stedman, Co-Chair Senator Charlie Huggins, Vice-Chair Senator Johnny Ellis Senator Dennis Egan Senator Donny Olson Senator Joe Thomas MEMBERS ABSENT None. ALSO PRESENT Tim Grussendorf, Staff, Co-Chair Hoffman; David Teal, Director, Legislative Finance Division; Karen Rehfeld, Director, Office of Management and Budget, Office of the Governor. SUMMARY HB 300 APPROP: OPERATING BUDGET/LOANS/FUNDS Senate CS for CSHB 300 (FIN) was REPORTED out of Committee with a "do pass" recommendation. HB 302 APPROP: MENTAL HEALTH BUDGET Senate CS for CSHB 302 (FIN) was REPORTED out of Committee with a "do pass" recommendation. CS FOR HOUSE BILL NO. 300(FIN) "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; and providing for an effective date." CS FOR HOUSE BILL NO. 302(FIN) "An Act making appropriations for the operating and cap expenses of the state's integrated comprehensive m health program; and providing for an effective date." 9:10:09 AM Co-Chair Hoffman discussed housekeeping. Co-Chair Stedman MOVED to ADOPT Amendment 1, 26-GH2823\U.5, Baily, 3/25/10: DEPARTMENT: Various-as shown in the table below ADD: $17,055.3 UGF (1004) Unrestricted general funds DELETE: $15,000.0 UGF (1004) Unrestricted general funds (estimate)  Amount  Added to  AgencyBase  Department of Administration 22.8 Department of Corrections 2,655.3 Department of Education and Early Development 57.2 Department of Environmental Conservation 37.8 Department of Fish and Game 77.7 Department of Health and Social Services 600.0 Department of Labor and Workforce Development 35.3 Department of Military and Veterans Affairs 327.3 Department of Natural Resources 68.0 Department of Public Safety 273.9 Department of Transportation & Public Facilities 11,250.0 University of Alaska 1,650.0 Total Unrestricted General (UGF) 17,055.3 EXPLANATION: This amendment revises the a appropriated under the "fuel trigger" provisions of sec 22 by increasing the trigger start point from $36 to dollars. This change reduces the projected a appropriations for high fuel costs by $15 million annua at any oil price above $51. The reduction appears in b reports as a revised estimate of the impact of section The actual impact will depend upon fuel prices during FY11. The amendment also distributes $15 million to var agencies to offset the reduction in funding through trigger mechanism. That $15 million is distributed agencies in the same manner and amount as occurred in under the August 1 trigger mechanism. In additio $2,053,300 is appropriated to the Department of Corrections in order to align available funding for utilities documented expenditures. The $17.05 million will be added agency base budgets. The intent of the amendment is to shift funding contingency (trigger) to base in recognition of sustain high oil prices. The amendment reduces the projected tri appropriations from $42 million to $27 million. Page 68, line 20: Delete "$35" Insert "$50" Page 68, line 22, following "section": Insert ", estimated to be $13,500,000," Page 68, line 26: Delete "$35" Insert "$50" Page 68, line 28, following "section": Insert ", estimated to be $13,500,000," Page 69, line 6, through page 70, line 30: Delete all material and insert: "$90 or more $20,000,000 89 19,500,000 88 19,000,000 87 18,500,000 86 18,000,000 85 17,500,000 84 17,000,000 83 16,500,000 82 16,000,000 81 15,500,000 80 15,000,000 79 14,500,000 78 14,000,000 77 13,500,000 76 13,000,000 75 12,500,000 74 12,000,000 73 11,500,000 72 11,000,000 71 10,500,000 70 10,000,000 69 9,500,000 68 9,000,000 67 8,500,000 66 8,000,000 65 7,500,000 64 7,000,000 63 6,500,000 62 6,000,000 61 5,500,000 60 5,000,000 59 4,500,000 58 4,000,000 57 3,500,000 56 3,000,000 55 2,500,000 54 2,000,000 53 1,500,000 52 1,000,000 51 500,000 50 0" Co-Chair Hoffman OBJECTED for the purpose of discussion. TIM GRUSSENDORF, STAFF, CO-CHAIR HOFFMAN, informed the committe that the "fuel trigger" used in the amendment was the same that had been adopted in the companion bill passed in the body. Co-Chair Hoffman WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. Co-Chair Stedman MOVED to ADOPT Amendment 2: STATEWIDE GENERAL FUND TRAVEL REDUCTION Senate House 10% Amendment Amendment less  ReductionReductionReductionHouse DEPARTMENT Administration (112.0) ( 112.0) ( 112.0) - Commerce, Community & Econ Dev (135.2) ( 135.2) ( 135.2) Corrections (197.4) - ( 197.4) 19 Education & Early Dev (68.4) ( 27.4) ( 68.4) 41.0 Environmental Conservation (115.9) ( 115.9) ( 115.9) - Fish and Game (191.5) ( 174.3) ( 191.5) 17.2 Governor (107.9) ( 107.9) ( 107.9) - Health & Social Services (311.0) ( 311.0) ( 311.0) - Labor & Workforce Dev (66.4) ( 66.4) ( 66.4) - Law (118.4) ( 58.2) ( 118.4) 60.2 Military & Veterans Affairs (17.2) ( 17.2) ( 17.2) - Natural Resources (192.2) ( 192.2) ( 192.2) - Public Safety (509.5) - Revenue (48.1) ( 48.1) ( 48.1) - Transportation (422.9) ( 422.9) ( 422.9) - University of Alaska (1,496.8) - Alaska Court System (171.9) - ( 171.9) 17 Legislature (387.7) ( 387.7) ( 387.7) - TOTAL (4,670.4) (2,176.4) (2,664.1) 4 87.7 Explanation: This amendment reduces travel authorization allocations with budgeted travel and with general funds. Be the budget does not identify line items by fund source, following method was used to determine the amount of travel is reduced in each allocation. Ratio of each general fund code 10% of the FY09 (UGF and DGF) in the House CS Amount of the actual travel X= to the total FY11 allocation's travel reduction expenditures funding Departments exempted from the Senate's travel reduction: Corrections, University, Public Safety and the Alaska Court System.   Revisions to the across-the-board travel reduction were  implemented in the following agencies: · Education and Early Development: A 50 percent reduction was taken from the Senate CS travel line in the Executive Administration allocation. All other allocations were held harmless. · Law: Funding for witness travel (totaling $60.2) was not cut. Fish and Game Boards and Advisory Committees: Exempt for members of the Board of Fisheries and the Board of to attend meetings; and for travel associated with advisory committee meetings and participation of advi committee representatives at the Board of Fisheries an Board of Game meetings. Co-Chair Hoffman OBJECTED for the purpose of discussion. Mr. Grussendorf explained that the amendment would reduce t authority in allocations with budgeted travel and with gen funds. Senator Egan queried whether the $20,000 reduction in Department of Education budget would restrict travel students that attended Mt. Edgecumbe High School. Grussendorf replied no. 9:13:07 AM Co-Chair Hoffman WITHDREW his OBJECTION. There being OBJECTION, it was so ordered. Co-Chair Stedman MOVED to ADOPT Amendment 3, 26-GH2823\U.8, Baily, 3/25/10: DEPARTMENT: Corrections  APPROPRIATION:  Population Management ALLOCATION:  Institution Director's Office   DELETE: 8,000.0 General Funds (1004) 100.0 Federal Receipts (1002)   EXPLANATION: The FY10 supplemental bill includes FY11 health insurance, and geographical differential increase for the Alaska Correctional Officers Association ( Bargaining Unit. This amendment removes the duplicated appropriation from the operating bill.   DEPARTMENT: Corrections  APPROPRIATION:  Inmate Health Care   INSERT INTENT: It is the intent of the legislature tha Department of Corrections develop and implement containment strategies regarding the provision of h care, and that the Department report results of efforts to the legislature by January 31, 2011.     DEPARTMENT: Health and Social Services  DELETE: Intent language at the department level Sec. 1, Page 18, Lines 9-11 SCS CSHB 300(FIN) Sec. 1, Page 4, Lines 23-25 SCS CSHB 302(FIN)   It is the intent of the legislature that the Department of Health and Social Services continue and enhance efforts to reduce fraud by both providers beneficiaries of the Medicaid program. EXPLANATION: Intent language at the department level duplicated. This amendment removes the duplicated i language from the Senate Operating and Mental Health bills.   DEPARTMENT: Health and Social Services    APPROPRIATION: Community Initiative Matching Grants ALLOCATION: Community Initiative Matching Grants DELETE: $250.0 General Funds (1004)    APPROPRIATION: Human Services Community Matching Grants ALLOCATION: Human Services Community Matching Grants ADD: $250.0 General Funds (1004)    EXPLANATION: Due to an error, funds were added to the grant program. This amendment corrects that error. The are intended for the Human Services Community Matching program.   DEPARTMENT: Law  APPROPRIATION: Civil Division ALLOCATION: BP Corrosion   Place the BP Corrosion allocation in a sepa appropriation.    EXPLANATION: Funding for litigation regarding oil pip corrosion has been in a separate appropriation in years in order to prevent the funding from being used other purposes. The Department requested that the funding moved to an allocation within the Civil Division. amendment matches the House structure-retaining the separ appropriation within the Department of Law.   DEPARTMENT: Fish and Game  APPROPRIATION: Sport Fisheries ALLOCATION: Sport Fisheries TRANSFER IN: 342.6 General Funds (1004)  APPROPRIATION: Commercial Fisheries ALLOCATION: Central Region Fisheries Management   TRANSFER OUT: 342.6 General Funds (1004) EXPLANATION: The Department of Fish and Game has indica that two projects included in the Senate Subcommittee b need to be moved from Central Region Fisheries Management Sport Fisheries. These projects are the Alexander Creek Control (127.6) and the Susitna River Fish Pas Restoration (215.0).   DEPARTMENT: Fish and Game APPROPRIATION: Commercial Fisheries ALLOCATION: Central Region Fisheries Management   DELETE: 75.0 General Funds (1004)  EXPLANATION: This amendment removes 75.0 from operating budget for the following two projects: the Kas River Smolt out migration counts (25.0); and the Big Smolt outmigration count (50.0). Because funding for projects is needed before July 1, 2010, these projects be included in the FY10 supplemental budget.   DEPARTMENT: University of Alaska  APPROPRIATION: Budget Reductions/Additions ALLOCATION : Budget Reductions/Additions - Systemwide  ADD INTENT: It is the intent of the legislature that University provide a report to legislature by February 1, 2011 specifies the amount of money transferred from and to each allocation in reference the 3% transfer of federal receipts unrestricted general funds, and university receipts into the Budget Reductions/Additions - Systemwide appropriation.   EXPLANATION: A total of $22.5 million (3% of federal receipt unrestricted general funds, and university receipts) transferred out of University of Alaska allocations (ex for the Small Business Development Center) and transferred into the Budget Reductions/Additions - Systemwide allocation to increase flexibility while retaining multi appropriations. As needed, these funds may be transferred out to various appropriations/allocations as progr develop and budgets are solidified in the FY11 Management Plan. Co-Chair Hoffman OBJECTED for the purpose of discussion. Mr. Grussendorf explained the amendment. He said that $8 mil had been removed from the Department of Corrections for contracts that had been previously discussed in committee, placing it in the supplemental budget. The second item rel to corrections was inmate healthcare. The intent langu requested that the department review options to reduce the of healthcare. The third change, for the Department of H and Social Services (HESS), was duplicate intent language was pulled. Also related to HESS was the Community Initiative Matching Grants, which was an error requiring a change of title that the money would be allocated under. 9:14:49 AM AT EASE 9:15:42 AM RECONVENED Mr. Grussendorf continued with Amendment 3. The next amendmen fell under the Department of Law and placed the Bri Petroleum (BP) Corrosion allocation in a separate appropriation. He continued through the list. He continued to the Department Fish and Game transfer. He stated that the money had misplaced by the subcommittee, the amendment corrected mistake. The next change was the reduction of $75,000 for Kasilof River Smolt project and the Big Lake Smolt outmigration count. Funding for he projects would be moved to supplemental. The next change requested the tracking of percent University of Alaska money from the systemwide fund. continued with the Department of Natural Resources. The inter earnings on the Cook Inlet Energy bond would remain with bonds. DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION, explaine that the next change would change the date on which a r from the Office of Budget and Management report on perso service transfers would be due from August 1, to October 1. Page 61, line 23: Delete "August 1" Insert "October 1" Page 61, line 25, following "2011.": Insert "The report submitted on October 1, 2011, should include transfers that occur as a result of the reappropriation of operating appropriations for the fiscal year ending June 30, 2011." Co-Chair Hoffman WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. Co-Chair Stedman MOVED to ADOPT Amendment 4:   DELETE ENTIRE LANGUAGE SECTION 19. GAS PIPELINE  DEVELOPMENT. (page 8, lines 8-24)    Explanation: Replace Governor's Oil and Gas Language appropriations with the following numbers in Section 1 of the bill.    Gov House Tota  Agency Allocation Transaction Request House Contingent House Se  AOGCC  AK Oil & Gas Conservation AOGCC Gasline Funding 1,150.9  - Comm  Governor  AK Resources Marketing and In-State Natural Gas Pipeline 6,500.0 - Development Development LawOil, Gas and MiningOutside Counsel and Experts 2 ,500.0 7 50.0 1 ,750.0 2 ,500.0 2 ,500.0 DNRGas Pipeline ImplementationFinancial Assessments and Modeling 2 ,300.0 6 90.0 1 ,610. DNRGas Pipeline ImplementationOutreach and Public Education 4 77.5 1 43.3 3 34.3 4 77.5 4 77 DNRGas Pipeline ImplementationProfessional and Support Staff 1 ,440.0 4 32.0 1 ,008.0 1 ,440.0 1 ,440.0 DORTax DivisionAGIA Info Reporting System 3 00.0 1 50.0 - 1 50.0 3 00.0 DORTax DivisionFour Commercial Analyst Positions 8 00.0 - - - 8 00.0 DORNatural Gas CommercializationFiscal Systems Analysis 1 ,500.0 4 15.0 1 ,085.0 1 ,500.0 1 ,500.0 DORNatural Gas CommercializationAGIA Fund Audit 5 0.0 5 0.0 - 5 0.0 5 0.0 TOTAL   1 7,018.4 2 ,630.3 5 ,787.3 8   DEPARTMENT: Governor  APPROPRIATION: Executive Operations ALLOCATION: AK Resources Marketing and Development ADD: $6,500.0 General Funds (1004) - IncOTI Explanation: To continue work related to the development of an in-state natural gas pipeline.     DEPARTMENT: Law  APPROPRIATION:  Civil Division ALLOCATION: Oil, Gas, and Mining ADD: $2,500.0 General Funds (1004) - IncOTI Explanation: Legal Support      DEPARTMENT: Natural Resources  APPROPRIATION: Resource Development ALLOCATION: Gas Pipeline Implementation ADD: 4,217.5 General Funds (1004) - IncOTI Four Permanent Full Time Positions Explanation: This funding will pay for professional and support staff for capacity ($1,440.0 & 4 pcns) and for AGIA implementation ($2,777.5).   DEPARTMENT: Revenue  APPROPRIATION: Administration and Support ALLOCATION: Natural Gas Commercialization ADD: $1,500.0 General Funds (1004) - IncOTI Explanation: Contractual fiscal systems analysis       APPROPRIATION: Taxation and Treasury ALLOCATION: Tax Division ADD: $300.0 General Funds (1004) - IncOTI Explanation: AGIA information reporting syst development       APPROPRIATION: Taxation and Treasury ALLOCATION: Tax Division ADD: $800.0 General Funds (1004) - Inc Four Permanent Full Time Positions Explanation: Four Commercial Analyst positions. Co-Chair Hoffman OBJECTED for the purpose of discussion. Mr. Grussendorf explained that the amendment removed oil and gas numbers from language and relocated them in numbers section of the legislation. The governor's requested amounts had been retained and moved to numbers section with the exception of the allocation the Alaska Oil and Gas Conservation Commission. 9:19:26 AM Co-Chair Stedman commented that it was proper budgetary practice when managing an issue of such magnitude that not be buried in the language section, rather placed numeric format for easy recognition. DepartmentPositions Teaching and Learning Support/Student and School Health & Personal Safety AchievementPrevention Coordinator Education & Early Development1200.0 Behavioral Health/Behavioral Health GrantsFamily Wellness Warriors Initiative Health & Social Services400.0 Behavioral Health/Community Action, Prevention, & Multi-disciplinary Rural Community Intervention GrantsPilot Project Health & Social Services1,350.0 Behavioral Health/Behavioral Trauma-Informed Training for Health GrantsBehavioral Health Providers Health & Social Services200.0 Children's Services/Family Children's Advocacy Center PreservationExpansion Health & Social Services40.0 Batterer's Intervention Evaluation and Investigation of Evidence Domestic Violence & Sexual Based Practice - Assault/Domestic Violence & Sexual Assaultone time funding Public Safety100.0 Domestic Violence & Sexual Assault/Domestic Violence & Planning Grants, Victimization Sexual AssaultStudy & Evaluation Public Safety350.0 Domestic Violence & Sexual Assault/Domestic Violence & Universal Public Education Sexual AssaultMarketing Campaign Public Safety300.0 Domestic Violence & Sexual Assault/Domestic Violence & Sexual AssaultPro-Bono Attorney Clearinghouse Public Safety60.0 Total13,000.0 up (over a 10-year period) prevention, victims' services, investigations and prosecutions significantly reduce the incidence of these crimes. A permanent, full-time, policy-level position coordinate the related activities of multiple stat agencies and nonprofits is a central element of initiative. That position is included in version U the bill, so is not part of this amendment.   DEPARTMENT: Department of Education & Development  APPROPRIATION: Teaching and Learning Support ALLOCATION: Student and School Achievement ADD: $200.0 GF 1004 and 1 PFT EXPLANATION: Health & Personal Safety Prevention Coordinator - This position within the Department Education and Early Development will work partnership with the Council on Domestic Violence Sexual Assault to establish guidelines for school- based health and personal safety education programs. In addition, this position will work with school districts across Alaska to encourage and support thei adoption of school-based health and personal safety education programs.   DEPARTMENT: Department of Health & Social Services  APPROPRIATION: Behavioral Health ALLOCATION: Behavioral Health Grants ADD: $400.0 GF 1004   EXPLANATION: Family Wellness Warriors Initiative  (FWWI) - This funding will be used to implement intervention strategies (developed by Southcentral Foundation, FWWI) in Dillingham and Bethel. FWWI is movement that brings together leaders of the Alaska Native Community, the Faith community, regional corporations and agencies, health care providers others to help restore wellness to the Alaska Native community; with special emphasis on addressing forms of family violence.   ALLOCATION: Community Action, Prevention, Intervention Grants ADD: $1,350.0 GF 1004   EXPLANATION: Multi-disciplinary Rural Community P Project - This initiative will identify a ru community interested in developing a model multi- disciplinary approach addressing DV/SA from a broa community perspective. The pilot project will use planning process such as the Strategic Prevention Framework to conduct a community assessment and review/assessment of available and missing community resources. Based on the first two assessments, funding will be used to develop a plan for addressing DV/SA in a comprehensive manner, implement identified evidence-based strategies and evaluate thes strategies through measurable outcomes.     ALLOCATION: Behavioral Health Grants ADD: $200.0 GF 1004   EXPLANATION: Trauma-Informed Training for Behavioral  Health Providers -  Trauma is recognized as a significant factor in a wi range of health, behavioral health and social problems including heart disease, cancer, chronic lung disease, mental health and substance abuse disorders, violence victimization and perpetration, self-injury, homelessness, prostitution and delinquency criminal behavior. This initiative will implement specialized trauma-informed curriculum to assure th community-based behavioral health providers integrate an understanding of trauma into their programs therapeutic approaches.   APPROPRIATION: Children's Services  ALLOCATION: Family Preservation   ADD:  $40.0 GF 1004   EXPLANATION: Children's Advocacy Center Expansion These funds will assist the community of Kodiak develop a Children's Advocacy Center, which will children and families impacted by child sexual assault/abuse.   DEPARTMENT: Department of Public Safety  APPROPRIATION: Domestic Violence and Sexual Assault ALLOCATION: Domestic Violence and Sexual Assault ADD:  $100.0 GF 1004 one time funding    EXPLANATION: Batterer's Intervention Evaluation Investigation of Evidence Based Practice - Recognizing the need for improved attention and service individuals who perpetrate domestic violence against another person, this component will review current Batterer's Intervention Programs (BIP) and research national evidence-based programs and practices th are being used in other states. Through th research, recommendations will be made for improving Alaska's outcomes for perpetrators of DV/SA.   ALLOCATION: Domestic Violence and Sexual Assault ADD:  $350.0 GF 1004    EXPLANATION: Planning, Victimization Study Evaluation - A portion of the funds will be available to the DVSA Coordinator for planning. Remaining fund will be used in partnership with the UAA Alaska Justice Center to construct a process to collect da to establish baseline rate of domestic violence Alaska. Funding will also be used to design conduct an evaluation of the success of the DV/S Initiative. ALLOCATION: Domestic Violence and Sexual Assault ADD:  $300.0 GF 1004    EXPLANATION: Universal Public Education Marketing Campaign - This funding will be used to develop implement a strategy for changing public perception (knowledge, attitudes, beliefs and behaviors) related to domestic violence and sexual assault via universal, multi-strategy public education campaign using print, radio, TV and internet.  ALLOCATION: Domestic Violence and Sexual Assault ADD:  $60.0 GF 1004    EXPLANATION: Pro-Bono Attorney Clearinghouse - funding will contribute to the existing successful Legal Advocacy Project Pro Bono Program of the Alaska Network on Domestic Violence and Sexual Assault establishing a clearinghouse for attorneys across Alaska who want to assist indigent victims with lega issues, mentor less experienced attorneys who ha agreed to take a case, answer the legal information and referral hotline, and assist with legal research.  Co-Chair Hoffman OBJECTED for the purpose of discussion. Mr. Grussendorf explained that the amendment was the firs step in a domestic violence prevention initiative. amendment married the allocations to the departments th would be involved in the initiative. Co-Chair Hoffman clarified that the amendment took discretion away from the governor and gave it to intended departments. Senator Ellis asked if there were other things that other body included in initiative that the committee not or vice-versa. Mr. Teal responded that there were no differences othe than the allocation to the departments; the total amount remained the same. What was not in the amendment was $200,000 for the coordinator. Co-Chair Hoffman WITHDREW his OBJECTION. There being OBJECTION, it was so ordered. Co-Chair Stedman MOVED to ADOPT Amendment 6: DEPARTMENT: Health and Social Services APPROPRIATION: Departmental Support Services ALLOCATION: Medicaid School Based Claims DELETE: $5,543,800 Federal Receipts (1002) ADD: Intent at the allocation level: It is the intent of the legislature that Department explain the Medicaid school based clai program to all school districts in Alaska encourage them to participate in the program. ADD: language section on page 2 EXPLANATION: This amendment addresses problems associated with federal receipt authority that has be used to "refinance" various programs (by spreading anticipated federal reimbursement for Medicaid school based claims to those programs, replacing general funds). The federal revenue failed to materialize, causing ratifications amounting to several million dollars of general funds. The reimbursement amounts are unrestricted federal funds that should not be mixed with regular federal receipts. The receipts will be coded as unrestricted federal receipts (code 1188) rather than as regular federal receipts (code 1002). Although the funds unrestricted, the federal government strongly suggests that the money go to K-12 education. The amendment removes $5,543,800 in restricted federal receipts from the Medicaid School Based Claims allocation and appropriates the funding in the sa amount with unrestricted federal receipts. Language sections will appropriate the amount received for reimbursement of Medicaid School Based Claims, estimated to be $5,543,800, as follows: · $215,000 for program operating costs; · An estimated $2.7 million to school districts participating in the program; and · An estimated $2.7 million to the K-12 foundation program for distribution to all school districts via the foundation formula. The fiscal impact of the amendment includes replacing $2.7 million of general funds transferred from Public Education Fund to the K-12 program with thes federal receipts, thereby reducing general fu expenditures by $2.7 million. Although the use federal receipts in K-12 would allow a reduction of general fund deposit to the Public Education Fund, th step is not taken in this amendment. Page 65, following line 22: Insert a new subsection to read: "(c) The amount of federal receipts received during the fiscal year ending June 30, 2011, reimbursement for school-based Medicaid claims, estimated to be $5,543,800, is appropriated for fiscal year ending June 30, 2011, as follows: (1) the sum of $215,000 is appropriated to the Department of Health and Social Services, Medicaid school-based claims allocation, for operating expenses; (2) after deducting the amount appropriated in (1) of this subsection, 50 percent of the remainder is appropriated to the Department of Health and Social Services, Medicaid school-based claims allocation, distribution to school districts participating in Medicaid school-based claims program; (3) after deducting the amount appropriated in (1) and (2) of this subsection, the remainder appropriated to the Department of Education and Earl Development, K-12 support, foundation program allocation for distribution to school districts through the foundation formula." Co-Chair Hoffman OBJECTED for the purpose of discussion. Mr. Teal explained that the amendment responded accounting problems, within HESS, tracking Medicaid school based claims. The amendment took federal receipts Medicaid school based claims. The federal money unrestricted and it had been suggested that the funds used for K-12 institutions. The blanket appropriation $5.5 million was being divided: the allocation would ke $215,000 for program operations; and of the remainder, percent would be distributed to the school districts th participated in the program, and the other 50 percent woul be allocated through the foundation formula to K- programs. Co-Chair Hoffman WITHDREW his OBJECTION. There being OBJECTION, it was so ordered. 9:25:29 AM Co-Chair Stedman MOVED to ADOPT Amendment 7. Transfer In $ 2,366.5 to Alaska C System/Therapeutic Courts    DEPARTMENT: Alaska Court System APPROPRIATION: Therapeutic Courts (new appropriation)  ALLOCATION: Therapeutic Courts   TRANSFER IN: General Funds 1004 $1,354.0 GF/MH 1037 $ 357.2 MHTAAR 1092 $ 138.0 Alcohol and Other Drug Abuse Treatment & Prevention Fund 1180 $ 517.3   ADD: Intent    It is the intent of the legislature that the Cour System contract to purchase services associated wi therapeutic courts in amounts it determines are in best interest of operating therapeutic courts efficiently and effectively. Contract amounts should stem from the amounts transferred from other agencies into this appropriation. EXPLANATION: In an effort to enhance coordination accountability for the Therapeutic Courts programs,  this amendment will consolidate all funding Therapeutic Courts into a new appropriation in Alaska Court System. Funds will be transferred fr the Departments of Administration ($355.0), Corrections ($252.2), Health and Social Services ($1,394.6) and Law ($364.7).   ADD: 1 PFT    EXPLANATION: For three years, the Court System supported the Bethel Case Coordinator as a limited duration position. Because of this position's "limited duration" status, it was off-budget and included in the Court System's position count. Th amendment recognizes this position as a permanent full-time position.   Transfer Out $ 355.0 DEPARTMENT: Department of Administration APPROPRIATION: Legal & Advocacy Services ALLOCATION:  Public Defender Agency   TRANSFER OUT: $290.0 General Funds 1004 ADD:  $290.0 I/A Receipts 1007 ALLOCATION:  Therapeutic Courts Support Services TRANSFER OUT: $65.0 General Funds 1004     Transfer Out $ 252.2 DEPARTMENT: Department of Corrections APPROPRIATION: Inmate Health Care ALLOCATION:  Behavioral Health Care TRANSFER OUT: $207.2 GF/MH 1037 ADD:  $207.2 I/A Receipts 1007 APPROPRIATION: Population Management ALLOCATION: Statewide Probation and Parole   TRANSFER OUT: $45.0 General Funds 1004   Transfer Out $1,394.6 DEPARTMENT: Department of Health & Social Services APPROPRIATION: Behavioral Health ALLOCATION: Behavioral Health Grants TRANSFER OUT: General Funds 1004 $ 272.0 GF/MH 1037 $ 150.0 Alcohol and Other Drug Abuse Treatment & Prevention Fund 1180 $ 450.0 ADD: $872.0 I/A Receipts 1007 ALLOCATION: Alcohol Safety Action Program (ASAP) TRANSFER OUT: General Funds 1004 $ 317.3 MHTAAR 1092 $ 138.0 Alcohol and Other Drug Abuse Treatment & Prevention Fund 1180 $ 67.3 ADD:  $390.4 I/A Receipts 1007   Transfer Out $ 364.7 DEPARTMENT: Department of Law APPROPRIATION: Criminal Division rd ALLOCATION:  3 Judicial District/Anchorage   TRANSFER OUT: $300.3 General Funds 1004 ADD:  $300.3 I/A Receipts 1007 th ALLOCATION:  4 Judicial District   TRANSFER OUT: $64.4 GF 1004 ADD:  $64.4 I/A Receipts 1007 Co-Chair Hoffman OBJECTED for the purpose of discussion. Mr. Grussendorf explained the amendment was a transfer to the court system of all the therapeutic cour allocations. The courts would transfer the funds the departments as necessary. Senator Ellis voiced full support of the amendment. Co-Chair Hoffman WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. 9:26:29 AM Co-Chair Stedman MOVED to ADOPT Amendment 8: DEPARTMENT: Transportation and Public Facilities APPROPRIATION: Highways, Aviation and Facilities ALLOCATION: Central Region Highways and Aviation ADD: $2,233.4 General Funds (1004)   Explanation: Additional funding is required to the minimum requirements of the Environmental Protection Agency (EPA) Municipal Storm Sewer System (MS4) permit. The MS4 permit went into effect February 1, 2010. The Department is required comply with this permit in its entirety beginning FY11. The Governor's initial request was $1,682.0. Subsequent to the amendment deadline, contract awards came in an additional $551.4 higher for a total need of $2,233.4.   Co-Chair Hoffman OBJECTED for the purpose of discussion. Mr. Grussendorf explained that the amendment would address Environmental Protection Agency (EPA) concerns regarding Anchorage street sweeping. The state was meeting the for the project. Senator Egan asked how the amendment related to the capital budget request. Mr. Teal responded that the funds were for the operating street sweeping equipment while adhering to regulations. Senator Ellis stated that street sweeping had been contentious issue in his district in the past year. hoped that the issue could be reasonably worked out. Co-Chair Stedman noted concerns regarding ongoing maintenance issues around the state. He thought th maintenance should be taken care of adequately so that state could focus on building infrastructure. Co-Chair Hoffman WITHDREW his OBJECTION. There being OBJECTION, it was so ordered. 9:29:17 AM Co-Chair Stedman MOVED to ADOPT Amendment 9:   DEPARTMENT: Health and Social Services APPROPRIATION: Department Support Svcs. ALLOCATION: Information Technology ADD: $512.5 General Fund (1004) EXPLANATION: Combined with funding included in Senate CS, this amendment provides a total of million of the Governor's $1,475.0 GF request. The proposed budget included three specific requests: two requests were to correct funding problems with mix of funds available for support of department efforts and the third request was to cover increased costs which are being experienced for new software maintenance and ETS costs for our mainframe EIS system which supports our eligibility system for Medicaid other public assistance programs as well as produces assistance payments for the many programs operated through our Division of Public Assistance. Proposed funding: Governor Senate Unrealizable federal receipts $750.0 GF $375.0 GF Replace HCS RSA funding $225.0 GF $112.5 GF Cost Inc Software, EIS, etc. $500.0 GF $0 GF Total 1475.0 GF 487.5 GF The Department has been working to correct ma deficiencies in the operating budget that have caused overspending in prior years because the mix of fund attributed to the program operations have accurately reflected the actual amounts that can collected from federal programs. In addition, Department direct billed some expenses to divisions that are not allowed under our cost allocation pl which guides all federal revenue collections. Governor's proposed budget was developed to partially remedy this problem. Because the IT budget includes primarily staffing costs and fixed contractual costs, the result of our inability to obtain adequate funding to maintain our operation will be the elimination current staff. We have developed an attachment th better outlines the systems supported throughout department and what is potentially at risk if our efforts are inadequate to address department needs. Co-Chair Hoffman OBJECTED for the purpose of discussion. Mr. Grussendorf noted that the amendment gave HESS $1 million for information technology. The amount was believed to be adequate. Co-Chair Hoffman WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. 9:30:20 AM Co-Chair Stedman MOVED to ADOPT Amendment 10: DEPARTMENT: Law APPROPRIATION: Civil Division ALLOCATION: Transportation Section ADD: $200.0 General Funds (1004)   EXPLANATION:  The Alaska Marine Highway System (AMHS) must file lawsuit against the contractor responsible for design and construction of the fast ferries Fairweather and Chenega. The suit will also name the companies responsible for the vessels' propulsion systems. AM must file suit now before the expiration of the statute of limitations. Since AMHS accepted delivery of the vessels in 2004 2005, the propulsion systems have been subject recurrent problems. Typical of the problems encountered with the vessels was the massive overhaul required the Fairweather beginning in February 2006 at Ketchikan Ship and Drydock. All four diesel engines had hairline cracks in their steel sleeves, and there we additional problems with bull gears, shafts bearings. If not addressed, the propulsion system problems will require continued maintenance, which wi disrupt service, and will shorten the expected lifespan of the engines. The lawsuit is against Robert E. Derecktor, Inc., contractor responsible for the design and construction of the ferries, and against MTU Friedrichshafen, Gm and MTU Detroit Diesel, Inc., the entities responsible for the vessels' propulsion systems. Co-Chair Hoffman OBJECTED for the purpose of discussion. Mr. Grussendorf explained that the amendment was a one-time only increment to the Department of Law for $200,000 general funds to address the Alaska Marine Highway System's lawsuit against the contractor for the M/V Fairweather M/V Chenega. Co-Chair Hoffman WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. 9:31:01 AM Senator Ellis MOVED to ADOPT Amendment 11: EXPLANATION: This amendment will add $200.0 to continue funding Partners for Progress, which provides support services Alaska's therapeutic courts. Partners for Progress has been an essential pa of Alaska's therapeutic court system 11 years, and provides crucial services that the Alaska Court System is unable to fulfill. It is a proven, evidence- based program that reduces recidivism and crime in communities across state while saving the state money.     DEPARTMENT: Alaska Court System APPROPRIATION: Therapeutic Courts (new appropriation) ALLOCATION: Therapeutic Courts Add: General Funds - 1004 $200.0   DEPARTMENT: Department of Health and Human Services APPROPRIATION: Behavioral Health ALLOCATION: Alcohol and Substance Abuse Programs Add: I/A Receipts - 1007 $200.0 Co-Chair Hoffman OBJECTED for the purpose of discussion. Senator Ellis explained that amendment would give $200,000 from the general fund to the court system to be transferred to HESS for the group Partners for Progress. Co-Chair Hoffman WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. 9:32:11 AM Senator Egan MOVED to ADOPT Amendment 12: APPORTION TRANSCRIPT COSTS FOR GRAND JURY PROCEEDINGS  TO APPROPRIATE AGENCIES    EXPLANATION: This amendment covers the increased costs the Alaska Court System faces for transcribing criminal proceedings. It will apportion funding increases for grand jury transcripts among Departments of Administration, Law and the Cour System based on actual transcript requests in 2009 At present, transcription funding is centralized within the Alaska Court System. DEPARTMENT: Department of Administration APPROPRIATION: Legal & Advocacy Services  ALLOCATION: Public Defender Agency   ADD:  $64.3 Unrestricted General Funds 1004 ALLOCATION: Office of Public Advocacy   ADD:  $53.8 Unrestricted General Funds 1004   DEPARTMENT: Department of Law APPROPRIATION: Criminal Division ALLOCATION: Criminal Justice Litigation   ADD:  $30.4 Unrestricted General Funds 1004 DEPARTMENT: Alaska Court System APPROPRIATION: Alaska Court System  ALLOCATION:  Trial Courts   ADD:  $148.5 I/A Receipts 1007 ADD: Intent    It is the intent of the Legislature that the FY budget will appropriate all transcription funding the agencies that order those transcripts from Alaska Court System. Co-Chair Hoffman OBJECTED for the purpose of discussion. Senator Egan explained that the amendment would divide money for transcription costs for grand jury proceedings appropriate agencies. The amendment coved the increased cost that the court system faced in transcribing criminal proceedings. Co-Chair Hoffman WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. 9:33:12 AM Senator Huggins MOVED to ADOPT Amendment 13: DEPARTMENT: Department of Environmental Conservation APPROPRIATION: Water ALLOCATION: Water Quality   ADD: Intent Language found on Page 14, Lines 5-7: "It is also the intent of the legislature that measures to address sanitation or habitat concerns shall not reduce or restrict opportunities for the public to access and participate in these fisheries." Therefore, the intent language should now read: "It is the intent of the legislature that the Departments of Environmental Conservation, Fish and Game, and Natural Resources work together to develop a plan to remove fish waste fr the Kenai and Kasilof Rivers dipnet fishery and maintain a safe and attractive riverfront. It also the intent of the legislature th measures to address sanitation habitat concerns shall not reduce restrict opportunities for the public access and participate in thes fisheries." EXPLANATION: While maintaining a safe and attractive riverfront on the Kenai and Kasilof rivers is commendable goal, this language could be construed as means to reduce or restrict opportunities for public to access and participate in the fisheries these waterways in the future. Some habitat management and simple mitigation measures are what are needed at this time. The beaches belo the mean high-water mark are public domain - access camping should not be cut off in the process addressing sanitation and habitat concerns. personal use fisheries are of a relatively shor duration and any impacts can be mitigated without interfering with the traditional use of public land and waters or with fish harvesting. I believe the original language included in the Senate CS is far too broad in scope and should be narrowed clarify the intent is to preserve and protect public access and use of the fisheries. Co-Chair Hoffman OBJECTED for the purpose of discussion. Senator Huggins explained that the amendment was intent language directed toward the Department of Environmental Conservation, the Department of Fish and Game, and DNR address the dipnet fishery waste problem without restricting access to fishermen. Co-Chair Hoffman WITHDREW his OBJECTION. There being OBJECTION, it was so ordered. 9:34:05 AM Senator Egan WITHDREW amendment 14: DEPARTMENT: Fish and Game APPROPRIATION: Wildlife Conservation ALLOCATION: Wildlife Conservation DELETE: 160.8; Unrestricted General Funds (1004) and the Division Director (PCN 11-2001) EXPLANATION: State government functions best when high level decision makers reside and conduct the bulk of their duties in the capital. Locating this important position in Juneau has served the department well for nearly twenty years, and the legislature and the public have received no convincing explanation as to how moving the job will enhance the management of Alaska's wildlife. Co-Chair Stedman MOVED to ADOPT Amendment 15: SALARY AND BENEFIT ADJUSTMENTS. (a) The operating budget appropriations made in sec. 1 of this include amounts for salary and benefit adjustments public officials, officers, and employees of executive branch, Alaska Court System employees,  employees of the legislature, and legislators and implement the terms for the fiscal year ending Ju 30, 2011, of the following ongoing collective  bargaining agreements:   (1) Alaska Vocational Technical Cente Teachers' Association - National Education  Association, representing the employees of the Alask Vocational Technical Center;   (2) Public Safety Employees Association,  representing the regularly commissioned public safet officers unit;   (3) Inland boatmen's Union of the Pacific,  for the unlicensed marine unit;   (4) International Organization Masters, Mates, and Pilots, for the masters, mates and pilots unit;   (5) Marine Engineers' Beneficial  Association   (6) Public Employees Local 71, for labor, trades, and crafts unit; and (7) Teachers' Education Association of Edgecumbe.  DEPARTMENT: Statewide ADD: $8,774,300 FUNDING SOURCE: Multiple fund sources per change records submitted electronically to the legislative Finance Division and as detailed on the attachment. EXPLANATION:  The Labor, Trades, and Crafts bargaining unit has reached a tentative agreement with the state for fiscal years FY2010-FY2012. In FY2011, there will be a conversion to a new wage schedule similar to that of the majority of state employees. Health Insurance will increase to $1,088 per employee per month. DEPARTMENT: Education and Early Childhood Development APPROPRIATION: Mt. Edgecumbe Boarding School ALLOCATION: Mt. Edgecumbe Boarding School ADD: $21.9 General Funds (1004) $142.4 Interagency Receipts (1007) EXPLANATION:  The State of Alaska's Department of Administration had reached an agreement on a three-year successor contract with the Teachers' Education Association of Mt. Edgecumbe (TEAME) covering the period of July 1, 2009 through June 30, 2010. The agreement contains the following FY2011 provisions: o 5 percent Sitka, Alaska geographic differential beginning July 1, 2010. o Beginning July 1, 2010, bargaining unit members will be returned to the State's Select Benefits Health Insurance program with a monthly health benefit of $1,088.00 per member. This amendment funds these agreement provisions. DEPARTMENT: Fund Transfers APPROPRIATION: Fund Transfers ALLOCATION: Group Health and Life Benefits Fund ADD:  $54.1 General Funds (1004) The sum of $54,054 is appropriated from the general fund to the Group Health and Life Fund in the Department of Administration, division of retirement and benefits, as a lump sum payment for health benefits reserves, to implement the terms of the collective bargaining agreement for the Teachers' Education Association of Mt. Edgecumbe, for the fiscal year ending June 30, 2011. The TEAME bargaining unit is returning to the State's Select Benefits Health Insurance program. This is the agreed upon amount to be deposited to the State Health Plan for reserves. DEPARTMENT: Administration APPROPRIATION: Centralized Administrative Services ALLOCATION: Office of the Commissioner ADD: $12.8 General Funds (1004) EXPLANATION:  The sum of $12,770 is appropriated from the general fund to the Department of Administration, office of the commissioner, as a lump sum payment to the union directed health trust, to implement the terms of the collective bargaining agreement for the Teachers' Education Association of Mt. Edgecumbe, for the fiscal year ending June 30, 2010. Last week the State reached an agreement with the Teachers' Education Association of Mt. Edgecumbe (TEAME). The TEAME agreement covers FY10-FY12. Since the TEAME agreement is retroactive to the beginning of FY10, a supplemental is requested for $12,770 General Funds for the Department Administration, office of the commissioner, to pay the agreed upon FY10 insurance costs of the NEA Health Trust. Mr. Teal explained that the amendment detailed agreement reached between Local 71 and the teachers at Mt. Edgecumbe. He noted that the total cost was $8.774 million. Co-Chair Hoffman WITHDREW his OBJECTION. There being OBJECTION, it was so ordered. 9:35:44 AM KAREN REHFELD, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, expressed appreciation to committee for adopting the amendments that had been particular importance to the governor. 9:36:55 AM Co-Chair Hoffman noted the extensive amount of public testimony that had been heard concerning the legislation. He informed the committee that 33 people had called into testify on behalf of the university's Marine Advisory Program (MAP), and highlighted that the budget included $300,000 to address funding for that program. He stated that 38 people had testified in support of domestic violence and sexual assault initiatives, which resulted Amendment 5. He furthered that 35 people had testified support of early childhood education, which resulted $600,000 for the Bright Beginnings program. He felt th the committee had responded well to public concerns. lamented that all of the concerns could not be addressed, but believed that he overall budget would provide services that the people of Alaska expected. Senator Ellis noted that the University of Alaska Anchorage Honors College had not made it into the budget. understood why the funding had not been available stressed that his office would seek alternative funding sources. 9:39:31 AM Senator Thomas commented on Amendment 14 which had be withdrawn. He voiced his concern of the movement of stat employee positions from the capitol city to other areas the state. 9:41:12 AM Senator Olson hoped that funding for the Vista Program could be found by alternative means. He expressed disappointment with the lack of funding for additional Alaska State Troopers and trusted that it would addressed in the future. Co-Chair Stedman MOVED Senate CS for CSHB 300 (FIN) amended out of Committee with individual recommendations and that authorization be given to the Legislative Finance Division and the Legislative Legal Services to make necessary technical and/or conforming amendments. Senate CS for CSHB 300 (FIN) was REPORTED out of Committee with a "do pass" recommendation. Co-Chair Stedman MOVED Senate CS for CSHB 302 (FIN) amended out of Committee with individual recommendations and that authorization be given to the Legislative Finance Division and the Legislative Legal Services to make necessary technical and/or conforming amendments. Senate CS for CSHB 302 (FIN) was REPORTED out of Committee with a "do pass" recommendation. 9:44:45 AM AT EASE 9:45:19 AM RECONVENED Co-Chair Hoffman gaveled out. ADJOURNMENT The meeting was adjourned at 9:45 AM.