CS FOR SENATE BILL NO. 61(FIN) am "An Act transferring funds to the public education fund; making supplemental and other appropriations; amending appropriations; and providing for an effective date." SHARON KELLY, STAFF, CO-CHAIR CHENAULT, explained the fast track supplemental. This bill consists of the remaining supplemental items that were originally requested by the Governor in HB 107 and in Section 1 of HB 139, the regular supplemental. Those items have all been heard by this committee previously. Ocean Ranger (HB 139 Section 1e $811.3) funding is not included in this bill. This CS contains $1,011,133.9 in General Funds, $21,482.5 in Federal Funds and $4,765.4 in Other Funds for a grand total of $1,037,382.8. Ms. Kelly reviewed the new and amended items in the bill: Sec. 1 (New Item) added in Senate Finance. The sum of $1,000,000,000 is appropriated from the general fund to the public education fund for distribution according to the Foundation formula. (Funding comes from FY07 carry-forward monies to fund FY 09 education costs). Sec. 2(a) (Previously heard-HB 107 Section 1) Tax pass thru to regional seafood development corporations - last year the appropriation was simply left out - $153.0 in tax assessments/Other Funds. (Previously heard-HB 139 (Section 1b) The Alaska Regulatory Commission requested $750.0 in Regulatory Receipts in the fast track to continue litigation at FERC to defend RCA's jurisdiction over intrastate TAPS rates. They also requested an increment of $600.0 in Regulatory Receipts in the FY08 budget. The amounts have been combined in this bill for a total of $1,350.0 and placed in this supplemental with an extended lapse date language to allow them to spend the funds as the litigation continues during FY's 07, 08 and 09. This helps spread the cost over the years and avoids the RCA from having to bump their collections to pay for this amount all in one fiscal year. Sec. 3(a) Previously heard-HB 139 Section 1c) Corrections Inmate Health Care $3,903.4 GF - The Administration has indicated they may need as much as a million more before yearend and that additional amount will be considered in another bill. (b)Previously heard-HB139 Section 1d) Anchorage Corrections Complex - largely to pay overtime for housing additional offenders - $1,082.7 GF. Sec. 4 (New Item)--$740.3 to pay for the Chenega School Roof Replacement. Added in Senate Finance. Sec. 5 (a) (New Item) The sum of $2,315,000 is appropriated to the Department of Health and Social Services, Office of the Commissioner, for operating costs for a comprehensive program associated with designing, planning, and implementing the legislative Medicaid Program Review Report dated February 2007. This funding is for FY's 07, 08, and 09 and is the beginning of effort to obtain the millions of dollars of savings identified in the report. Federal receipts $1,182,500 General fund $1,132,500 (b) (Previously heard-HB 139, Section g) Amend language to repair Pioneer Home Roofs. No new money. (c) (Previously heard HB 139, Section 1f) $3.5 million (GF) and $3.0 million (COP) for the Fairbanks Virology Laboratory Completion. Original appropriation was $24 million in FY 06. Sec. 6 (a and b) (Previously heard-HB107, Section 2) This funding pays the Department of Law for the work it did investigating the Mercer actuarial matter - it does not pay for any litigation costs but makes the department whole. Sec. 7 (Previously heard-HB 139 Sections a-f) DOTPF sections. (g) (New Item) Chitina re-appropriation is new and added here under. There is no dollar change. This allows the bridge over O'Brien Creek to be rebuilt providing access to the Chitina dip netters before the salmon runs this year. Sec. 8 (Previously heard-HB 107 Section 3) Funding for special election in April on employment benefits for same-sex partners. The request was amended down by $381.3, current request is $775.0. Sec. 9 (New Item) This amendment was added on the Senate Floor. It is a re-appropriation not to exceed $600,000 to Legislative Council for special session expenses for the fiscal year ending June 30, 2007. 3:38:24 PM Representative Joule inquired about Section 6, regarding an $11-$12 million lawsuit action. Co-Chair Chenault reported that the lawsuit has not been denied and there has been discussion with the Department of Law on the matter. MICHAEL BARNHILL, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, reported that the department would like to pursue the case and obtain funding for it. He related that the money appropriated is just for the investigation that was completed in January 2007. Representative Joule asked if the lawsuit is going forward. Mr. Barnhill reported that nothing has changed in terms of the level of confidence and in terms of the recommendation to the legislature to fund the litigation. 3:41:22 PM Representative Crawford asked what happens next regarding the lawsuit and funding. Mr. Barnhill reported that the Department of Law has reduced the request from $12 million to $6.75 million and the hope is that the request will be reconsidered by the legislature. Representative Gara reported that the Department of Law previously answered his questions about the case being strong and convinced him that the law firm previously selected would be best. He asked if that has changed. Mr. Barnhill related that the choice of Paul, Weiss, Rifkind, Wharton, & Garrison, LLP, of New York remains the same. There has been discussion of adjusting the contingency fee arrangement. Representative Gara stated support for the Department of Law's recommendation as to how to proceed on the actuarial malpractice case. 3:44:52 PM JOHN MACKINNON, DEPUTY DIRECTOR, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, responded to a question from Representative Gara regarding the repair of existing facilities at Chitina. Mr. MacKinnon emphasized that the purpose is not to force an eminent domain issue. Improvements will be made to a bridge and boat launch at O'Brian Creek. Co-Chair Chenault asked if the language was straightened out on that subject. Mr. MacKinnon said yes. 3:47:55 PM Representative Gara referred to funding for the Legislative Medicaid Program Review Report in Section 5. He wanted assurance that the appropriation was necessary. He wondered how a contractor would be selected and who it would be. JANET CLARKE, ASSISTANT COMMISSIONER, DIVISION OF FINANCE AND MANAGEMENT SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, pointed out that the work plan is attached to the request for the supplemental. She explained that if the funds come to the department rather than to the legislature, there will have to be a competitive bid process. She explained about the 50 percent federal reimbursement. Representative Gara asked if the contractor will be Pacific Health Group again. Ms. Clarke reported that it would go out to competitive bid. Representative Gara said he would accept the department's judgment. 3:51:44 PM Vice Chair Stoltze MOVED to REPORT CSSB 61 (FIN)am out of committee with individual recommendations. There being NO OBJECTION, it was so ordered. CSSB 61 (FIN)am was REPORTED out of Committee with a "no recommendation". 3:52:40 PM