HOUSE BILL NO. 300 "An Act making appropriations for the operating and loan program expenses of state government, for certain programs, and to capitalize funds; making supplemental appropriations; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska; and providing for an effective date." HOUSE BILL NO. 302 "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." 3:15:07 PM Co-Chair Hawker noted that the purpose of the meeting was to process amendments to the operating budget (HB 300 and HB 302) and provided a broad overview of the amendments. He added that the committee would address the gasline funding amendment at a future meeting. He explained that a majority of members present (six votes) would be required to move an amendment from committee. 3:19:29 PM Amendment 1 Co-Chair Hawker MOVED to ADOPT Amendment 1: OFFERED BY: Representatives Hawker, Stoltze, Thomas, Austerman, Fairclough, Joule, Kelly, Doogan Part 1:  DEPARTMENT: Commerce, Community & Economic  Development APPROPRIATION: Alaska Seafood Marketing Institute ALLOCATION: Alaska Seafood Marketing Institute ADD: $500.0 GF/PR (1005) DELETE: $500.0 RSS (1156)   EXPLANATION: $500.0 of the Governor's amended request for approximately $10 million of RSS was not switched from RSS to GF/PR in the House CS as part of the Budget Clarification Project. This amendment corrects this oversight and will not impact ASMI's budget. Part 2:  DEPARTMENT: Environmental Conservation APPROPRIATION: Environmental Health ALLOCATION: Laboratory Services DELETE: $100.4 GF (1004)  Plus 1 PFT position APPROPRIATION: Environmental Health ALLOCATION: Food Safety & Sanitation ADD: $100.4 GF (1004)  Plus 1 PFT position  EXPLANATION: This amendment is a technical correction to the allocation selected for amendment #1 that was offered and accepted at the DEC House Subcommittee closeout. The original increment adds an Environmental Health Technician and related costs in support of the permitting and inspection of new shellfish farms. This increment was placed in the Laboratory Services allocation but DEC wants the increment placed in the Food Safety and Sanitation allocation. Both allocations are within the Environmental Health appropriation in DEC. Part 3:    DEPARTMENT: Fish and Game  APPROPRIATION: Sport Fisheries ALLOCATION: Sport Fisheries ADD: $450.1 Fish and Game Fund (1024) DELETE: $450.1 GF Program Receipts (1005) ADD: The following new LANGUAGE subsection to Sec. 25: Fees collected at boating and angling access sites managed by the Department of Natural Resources, division of parks and outdoor recreation, under a cooperative agreement authorized under AS 16.05.050(a)(6), during the fiscal year ending June 30, 2011, estimated to be $450,100, are appropriated to the fish and game fund (AS 16.05.100).   EXPLANATION: The U.S. Fish and Wildlife Service expressed concern that a portion of the fund changes associated with the budget clarification project provide insufficient tracking of boating access fees. The federal government prefers that boating receipts be deposited into the F&G fund. This amendment aligns revenue and expenditures with federal requirements (see explanation below). The U.S. Fish and Wildlife Service requires that all user fees collected on federally acquired or developed facilities must be used for maintenance and operation of those facilities. ADF&G Sport Fisheries division has current and ongoing grants with USFWS which creates a federal nexus to these user fees collected by Department of Natural Resources (DNR). Under U.S. Fish and Wildlife Service (USFWS) federal grants, all user fees collected on federally acquired or developed facilities must be used for maintenance and operation of those facilities. ADF&G Sport Fisheries division has current and ongoing grants with USFWS which creates a federal nexus to these user fees collected by Department of Natural Resources (DNR). A cooperative agreement provides the mechanism for transfer of user fees from DNR to ADF&G Fish and Game fund. Federal Office of Inspector General (OIG) auditors have approved this process and the deposit of the fees in the Fish and Game fund as it ensures ADF&G maintains control over the funds and the maintenance and operation of the facilities. Part 4:  DEPARTMENT: Natural Resources APPROPRIATION: Resource Development ALLOCATION: Recorder's Office/Uniform Commercial Code ADD: $4,470.4 GF/PR (1005) DELETE: $4,470.4 RSS (1156) EXPLANATION: $4,470.4 of the Governor's request of RSS was not switched from RSS to GF/PR in the House CS as part of the Budget Clarification Project. This amendment corrects this oversight and will not impact the Recorder's Office/Uniform Commercial Code's budget. Part 5:  DEPARTMENT: Public Safety APPROPRIATION: Alaska State Troopers ALLOCATION: Narcotics Task Force  DELETE: $25.2 Stimulus09 (1212) EXPLANATION: The Governor requested a $25.2 fund source change from one-time ARRA funding to general funds to cover salary adjustments for existing PSEA bargaining agreements. The basis of the request was that the ARRA fund source was "unrealizable" in this allocation in FY11. While it may be true that no new ARRA receipts will be available in FY11, carryforward of $5.4 million ARRA receipts is anticipated. In this situation, the fund change is not necessary because the ARRA fund source will be available in FY11. However, by denying the agency's request, the subcommittee not only denied an increase in GF, but also appropriated new FY11 ARRA funding. This amendment eliminates new ARRA authorization (which is not expected to be available) in anticipation of using a portion of the allocation's $5.4 million ARRA carryforward to pay the salary adjustments. Part 6:  DEPARTMENT: Revenue APPROPRIATION:  Child Support Services Division ALLOCATION:  Child Support Services Division DELETE: Page, 37, lines 6-9, all material, which reads: The amount appropriated by this appropriation includes the unexpended and unobligated balance on June 30, 2010, of the receipts collected under the state's share of child support collections for reimbursement of the cost of the Alaska temporary assistance program as provided under AS 25.27.120. EXPLANATION: The deleted language permits CSSD to carry-forward receipts from the prior year. Because the CS replaced receipts with General Fund Match, the language is unnecessary.   Part 7:    DEPARTMENT: Revenue APPROPRIATION:  Child Support Services Division ALLOCATION:  Child Support Services Division ADD: $297.0 Stimulus09 (1212) Transaction Type: Inc OTI   EXPLANATION: This amendment authorizes expenditure of $297,000 of federal FY10 ARRA Stimulus Funds. This st funding will be available to the Division in the 1 quarter of state FY11. Part 8: DEPARTMENT: Transportation & Public Facilities APPROPRIATION:  Design, Engineering & Construction ALLOCATION:  SE Design and Engineering Services ADD: $50.0 General Fund Program Receipts (1005) DELETE: $50.0 Receipt Supported Services (1156) EXPLANATION: This was an omission in the fund source changes that are a part of the Budget Clarification Project. Co-Chair Stoltze OBJECTED. Co-Chair Hawker detailed that Amendment 1 was a Legislative Finance Services technical amendment with a net zero financial effect. The amendment that would properly classify fund sources. Co-Chair Stoltze WITHDREW his OBJECTION. There being NO further OBJECTION, Amendment 1 was ADOPTED. 3:20:19 PM Amendment 2 Co-Chair Hawker MOVED to ADOPT Amendment 2 (26-GH2823\M.10, Bailey, 3/8/10): Page 65, line 30: Delete "$35" Insert "$50" Page 66, line 1, following "section": Insert ", estimated to be $13,500,000," Page 66, line 5: Delete "$35" Insert "$50" Page 66, line 7, following "section": Insert ", estimated to be $13,500,000," Page 66, line 17, through page 68, line 10: 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" OFFERED BY: Representatives Hawker, Stoltze, Thomas, Austerman, Fairclough, Joule, Kelly, Doogan   Numbers Section    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 amounts appropriated under the "fuel trigger" provisions of section 21 by increasing the trigger start point from $36 to $51 dollars. This change reduces the projected annual appropriations for high fuel costs by $15 million annually at any oil price above $51. The reduction appears in budget reports as a revised estimate of the impact of section 21. The actual impact will depend upon fuel prices during FY11. The amendment also distributes $15 million to various agencies to offset the reduction in funding through the trigger mechanism. That $15 million is distributed to agencies in the same manner and amount as occurred in FY10 under the August 1 trigger mechanism. In addition, $2,053,300 is appropriated to the Department of Corrections in order to align available funding for utilities with documented expenditures. The $17.05 million will be added to agency base budgets. The intent of the amendment is to shift funding from contingency (trigger) to base in recognition of sustained high oil prices. The amendment reduces the projected trigger appropriations from $42 million to $27 million. Co-Chair Stoltze OBJECTED. Co-Chair Hawker explained that Amendment 2 would change the fuel trigger. The amendment would take the first $15 million formally allocated under the fuel trigger when oil was $30 per barrel and put the amount into the base budget of agencies. The amendment also would lower the amount of the contingent appropriation by the same $15 million. There would be a net zero impact; however, analysis of the effectiveness of the trigger has identified that the Department of Corrections needed an additional $2 million to make the fuel trigger work. He noted disagreement about the issue. Co-Chair Stoltze WITHDREW his OBJECTION. There being NO further OBJECTION, Amendment 2 was ADOPTED. 3:22:15 PM Amendment 3 Co-Chair Hawker MOVED to ADOPT Amendment 3: OFFERED BY: Representatives Hawker, Stoltze, Thomas, Austerman, Fairclough, Joule, Kelly, Doogan   Transfer In $2,230.8 to Alaska Court System  Therapeutic Courts    DEPARTMENT: Alaska Court System APPROPRIATION: Therapeutic Courts (new appropriation)  ALLOCATION: Therapeutic Courts TRANSFER IN: General Funds 1004 $1,356.3 GF/MH 1037 $ 357.2 Alcohol and Other Drug Abuse Treatment & Prevention Fund 1180 $ 517.3 ADD: Intent: It is the intent of the legislature that contracts to purchase services associated with therapeutic courts be based loosely on the amounts transferred from other agencies into this appropriation. Contractual agreements should be for amounts determined by the Court System to be in the best interest of operating therapeutic courts in an efficient and effective manner.    EXPLANATION: This amendment will consolidate all funding for Therapeutic Courts into a new appropriation in the Alaska Court System. Funds will be transferred from the Departments of Law ($364.7), Health and Social Services ($1,663.7), Corrections ($252.2), and Administration ($355.0) and the Alaska Court System/Therapeutic Court's component ($2,018.3) in an effort to enhance coordination and accountability for the Therapeutic Courts programs. 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) Transfer Out $1,258.9 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 & Substance Abuse Programs TRANSFER OUT: General Funds 1004 $ 319.6 Alcohol and Other Drug Abuse Treatment & Prevention Fund 1180 $ 67.3 ADD: $254.7 I/A Receipts (1007) 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 ADD: $45.0. I/A Receipts (1007)   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) ADD: $65.0 I/A Receipts (1007) Co-Chair Stoltze OBJECTED. Co-Chair Hawker explained that Amendment 3 would implement the establishment of therapeutic courts as an Alaska Court System appropriation. Money that has been used for or appropriated for intended use by the therapeutic courts would be taken out of the Departments of Law, Health and Social Services, Corrections, and Administration; money in the agencies would be replaced with receipt authority so that the court system could buy services through reimbursable services agreements (RSAs). The court system would be directed as much as possible to procure the services from the agencies from which the money was secured. He underlined the legislature's commitment to a more centralized management of the therapeutic courts. Co-Chair Stoltze WITHDREW his OBJECTION. There being NO further OBJECTION, Amendment 3 was ADOPTED. 3:24:20 PM Amendment 4 Co-Chair Hawker MOVED to ADOPT Amendment 4: OFFERED BY: Representatives Hawker, Stoltze, Thomas, Austerman, Fairclough, Joule, Kelly, Doogan   DEPARTMENT: Revenue APPROPRIATION: Alaska Permanent Fund Corporation ALLOCATION: APFC Custody and Management Fees Section 1, Page 38, Line 3: Convert the APFC Custody and Management Fees allocation into a separate appropriation. EXPLANATION: This amendment will restrict use of APFC Custody and Management Fees to their sole intended purpose by placing them in a stand-alone appropriation. Co-Chair Stoltze OBJECTED. Co-Chair Hawker detailed that Amendment 4 would create a separate appropriation within the Department of Revenue budget for the Alaska Permanent Fund that would separate management and custodial fees from the internal operations of the fund corporation. He emphasized that the item had nothing to do with the dividend, but would restrict the management funds. Co-Chair Stoltze WITHDREW his OBJECTION. There being NO further OBJECTION, Amendment 4 was ADOPTED. 3:25:38 PM Amendment 5 Co-Chair Hawker MOVED to ADOPT Amendment 5:   OFFERED BY: Representatives Hawker, Stoltze, Thomas, Austerman, Fairclough, Joule, Kelly   DEPARTMENT: University of Alaska APPROPRIATION: University of Alaska DELETE: INTENT It is the intent of the legislature that future requests by the University of Alaska for Unrestricted General Funds move toward a long-term goal of 125% of Actual University Receipts for the most recently closed fiscal year. ADD: INTENT It is the intent of the legislature that the University of Alaska's FY12 budget request for unrestricted general funds not exceed 129 percent of actual University Receipts for FY10. It is the intent of the legislature that future requests by the University of Alaska for unrestricted general funds move toward a long-term goal of 125 percent of actual University Receipts for the most recently closed fiscal year.   EXPLANATION: The addition of a specific target for FY12 is intended to clarify and limit the expectations of both the University and the legislature. The unrestricted general fund (UGF) increment in the CS was based on the ratio of UGF to designated general funds (DGF). DGF includes TVEP funding (state funding for technical and vocational education) in addition to University Receipts. Inclusion of TVEP in future funding ratios would result in the state matching state funds appropriated to the University. If the match ratio used to determine the FY11 appropriation had used a ratio of UGF to University Receipts of 129 percent, the University would have received $1.5 million less in unrestricted general funds. Applying a 129 percent ratio in FY12 assures movement toward the long-term goal that UGF not exceed 125 percent of University Receipts. Co-Chair Stoltze OBJECTED. Co-Chair Hawker reported that the university's budget had been considered by the committee as a whole, resulting in a formula for matching university-generated receipts. Amendment 5 would expand intent language related to the ratio not exceeding the current ratio and general fund receipts moving towards 125 percent of actual receipts for the previously closed fiscal year. He noted that the current ratio was 127 percent; the amendment shows 129 percent and incorporates a revision of the calculations of the university receipts. The calculation had previously inappropriately included Technical and Vocational Education Program (TVEP) funding, which is state money that does not belong in the matching formula. Representative Gara disagreed with the approach. He believed the 129 percent ratio was substantially lower than the 135 percent ratio that has existed over the past five years for the university. He understood the legislature's caution regarding agency growth, but he viewed the university as a major creator of jobs in the state. He would have preferred the historical ratio formula. Co-Chair Stoltze MAINTAINED his OBJECTION. 3:28:56 PM A roll call vote was taken on the motion to adopt Amendment 5. IN FAVOR: Fairclough, Joule, Kelly, Salmon, Thomas, Stoltze, Hawker OPPOSED: Doogan, Foster, Gara Representative Austerman was absent from the vote. The MOTION PASSED (7/3). Amendment 5 was ADOPTED. Co-Chair Hawker noted that any committee member who wished to could add their name as a sponsor to any amendment. 3:31:30 PM Amendment 6 Co-Chair Hawker MOVED to ADOPT Amendment 6 (26-GH2823\M.9, Bailey, 3/8/10): Page 79, line 22, through Page 80, line 2: Delete all material and insert: "* Sec. 33. CONSTITUTIONAL BUDGET RESERVE FUND. (a) An amount equal to the investment earnings that would otherwise have been earned by the budget reserve fund (art. IX, sec. 17, Constitution of the State of Alaska) on money borrowed from the budget reserve fund to meet general fund expenditures during the fiscal year ending June 30, 2011, is appropriated from the general fund to the budget reserve fund for the fiscal year ending June 30, 2011, for the purpose of compensating the budget reserve fund for lost earnings." Page 80, line 5, following "fund": Insert "(art. IX, sec. 17, Constitution of the State of Alaska)" Co-Chair Stoltze OBJECTED. Co-Chair Hawker explained that Amendment 6 would clarify language in statute so that when money from the Constitutional Budget Reserve (CBR) is used to meet short- term cash-flow requirements of the general fund, the loan would be paid back with interest in the amount that the CBR would have made. Co-Chair Stoltze WITHDREW his OBJECTION. There being NO further OBJECTION, Amendment 6 was ADOPTED. 3:32:44 PM Amendment 7 Co-Chair Hawker MOVED to ADOPT Amendment 7: OFFERED BY: Representatives Hawker, Stoltze, Thomas, Austerman, Fairclough, Joule, Kelly, Doogan, Gara   DEPARTMENT: Health and Social Services APPROPRIATION:  Behavioral Health ALLOCATION:  AK Fetal Alcohol Syndrome Program ADD: Intent language at the allocation level  It is the intent of the legislature that AK Fetal Alcohol Syndrome Programs located in Juneau, Kenai, Sitka, and Bethel be expanded.  EXPLANATION: This amendment specifies that an increment approved by the HSS subcommittee is intended to expand services in the four named communities. The transaction title will be modified to reflect the subcommittee's intent. Co-Chair Stoltze OBJECTED. Co-Chair Hawker explained that Amendment 7 reflected the intent of the subcommittee and the Department of Health and Social Services in adopting an increment for fetal alcohol syndrome programs specifically in Juneau, Kenai, Sitka, and Bethel. The language had not been included in the subcommittee budget. Co-Chair Stoltze WITHDREW his OBJECTION. There being NO further OBJECTION, Amendment 7 was ADOPTED. 3:33:45 PM Amendment 8 Co-Chair Hawker MOVED to ADOPT Amendment 8: OFFERED BY: Representatives Hawker, Stoltze, Thomas, Austerman, Fairclough, Joule, Kelly, Doogan   STATEWIDE 10% GENERAL FUND TRAVEL REDUCTION 10% Amendment  DEPARTMENTReductionReduction Administration ( 112.0) (112.0) Commerce, Community & Econ Dev ( 135.2) (135.2) Corrections ( 197.4) (197.4) Education & Early Dev ( 68.4) (68.4) Environmental Conservation ( 115.9) (115.9) Fish and Game ( 191.5) (191.5) Governor ( 107.9) (107.9) Health & Social Services ( 311.0) (311.0) Labor & Workforce Dev ( 66.4) (66.4) Law ( 118.4) (118.4) Military & Veterans Affairs ( 17.2) (17.2) Natural Resources ( 192.2) (192.2) Public Safety ( 509.5) - Revenue ( 48.1) (48.1) Transportation ( 422.9) (422.9) University of Alaska ( 1,496.8) - Alaska Court System ( 171.9) (171.9) Legislature ( 387.7) (387.7) TOTAL ( 4,670.4) (2,664.1) Explanation: This amendment reduces travel authorization in allocations with budgeted travel and with general funds. Departments should prioritize travel and use existing technology as appropriate to facilitate meetings. The University and Public Safety are excluded from the reductions. In addition, three fund codes (PFD Criminal Funds, Vehicle Rental Taxes, and VoTech Ed) were excluded because the legislature fully appropriates these funds. Because the budget does not identify line items by fund source, the following method was used to determine the amount of travel that 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 Please see the Transaction Detail report for the amounts eliminated from each allocation. Note: Combining this amendment with other House Finance Committee Actions may cause negative line items or fund sources. Should this occur, Legislative Finance will make technical adjustments to the amounts in the travel amendment to correct these errors. Co-Chair Stoltze OBJECTED. Co-Chair Hawker detailed that Amendment 8 was the result of debate about cutting costs. The 2009 travel budget for state agencies was considered and Legislative Finance calculated the number required to reduce the travel budget by ten percent. Travel is currently a line-item adjustment that does not require permission from the legislature to move around. He viewed the amendment as a general statement of intent for agencies to prioritize and operate more efficiently. He noted that the university and the Department of Public Safety were exempted from the reduction. Co-Chair Hawker emphasized that the reduction would be calculated only on the general fund component of agency budgets, not on travel funded by federal or other sourced funds. The proposed total reduction would be $2.6 million. 3:37:31 PM Co-Chair Stoltze noted that the legislature's travel budget was cut as well. Co-Chair Hawker detailed that the legislature's travel budget would be reduced by $387,000. Representative Gara thought the approach was fair, but believed that employees from the Alaska Court System and the Department of Law often traveled because they had to. Co-Chair Hawker agreed that the process would spark debate. Co-Chair Stoltze WITHDREW his OBJECTION. There being NO further OBJECTION, Amendment 8 was ADOPTED. 3:39:07 PM Amendment 9 Co-Chair Hawker pointed out that Amendment 9 was related to Medicaid appropriations. He MOVED to ADOPT Amendment 9: OFFERED BY: Representatives Hawker, Stoltze, Thomas, Austerman, Fairclough, Joule, Kelly, Doogan, Gara   DEPARTMENT: Health and Social Services APPROPRIATION: Medicaid Services (new appropriation)  ADD: Transfer the following allocations from their existing locations to the newly created Medicaid Services appropriation: Behavioral Health Medicaid Services Children's Medicaid Services Adult Preventative Dental Medicaid Services Health Care Medicaid Services Senior and Disabilities Medicaid Services ADD: Intent language at the appropriation level It is the intent of the legislature that the Department of Health and Social Services identify and investigate alternatives that could improve internal administrative management and accounting controls over the Medicaid program, including determining the viability of outsourcing those activities. The Department should be prepared to present its findings to the legislature during the 2011 session. EXPLANATION: Consolidate all Medicaid allocations within the Department of Health and Social Services to the newly created Medicaid Services appropriation. Co-Chair Stoltze OBJECTED. Co-Chair Hawker explained that the amendment would put all Medicaid services into a single appropriation in the Department of Health and Social Services budget. He provided historical background. The department had requested the change. The 2003 legislature had made the decision to separate the Medicaid components into their functional categories (including Behavioral Health Medicaid Services, Children's Medicaid Services, Adult Preventative Dental Medicaid Services, Health Care Medicaid Services, and Senior and Disabilities Medicaid Services). He spoke to the evolving process of centralization and de- centralization. He noted problems with revenue collections at the department; he believed the single appropriation would aid the agency in establishing needed controls. Co-Chair Stoltze WITHDREW his OBJECTION. There being NO further OBJECTION, Amendment 9 was ADOPTED. 3:41:49 PM Amendment 10 Co-Chair Hawker MOVED to ADOPT Amendment 10: OFFERED BY: Representatives Hawker, Stoltze, Thomas, Austerman, Fairclough, Joule, Kelly, Doogan, Gara DEPARTMENT: Health and Social Services APPROPRIATION: Medicaid Services (new appropriation)   ALLOCATION: Behavioral Health Medicaid Services DELETE: $1,116.2 GF/MH (1037) DELETE: $1,628.1 Federal Receipts (1002) DELETE: $297.1 Stimulus09 (1212) ALLOCATION: Health Care Medicaid Services ADD: $75.4 GF/Match (1003) ADD: $146.5 Federal Receipts (1002) ADD: $17.5 Stimulus09 (1212) ALLOCATION: Senior and Disabilities Medicaid Serv. DELETE: $1,616.7 GF/Match (1003) DELETE: $2,201.5 Federal Receipts (1002) DELETE: $447.5 Stimulus09 (1212) EXPLANATION: Funding adjustments to Medicaid allocations split the differences between the Governor's Amended Medicaid request and projections of a legislative consultant. The result is a reduction of 2,657.5 in general funds. Co-Chair Stoltze OBJECTED. Co-Chair Hawker explained that Amendment 10 was also related to Medicaid and would split the difference between the agency's originally requested budget for the Medicaid components and the analysis that the consultant Janet Clark had presented. He referred to debate in committee. The department would like more money but acknowledged the problem of excess authority related to federal funds, which had contributed to an environment of less control. Since Medicaid is a formula program, the department will have to ask for more money if it falls short. The intent is to reduce the amount of general funds for the Medicaid program in its totality while allowing the agency to move money to functional areas; $2.6 million in general funds would be removed. Representative Gara spoke in support of the amendment. He clarified that the amendment would not cut services to qualified people. The amendment represented the legislature's best estimate of how many people would request services before the end of the next fiscal year. He thought the approach was fair. Co-Chair Stoltze WITHDREW his OBJECTION. There being NO further OBJECTION, Amendment 10 was ADOPTED. 3:45:47 PM Amendment 11 Co-Chair Hawker MOVED to ADOPT Amendment 11: OFFERED BY: Representatives Hawker, Stoltze, Thomas, Austerman, Fairclough, Joule, Kelly, Doogan  DEPARTMENT: Health and Social Services APPROPRIATION: Health Care Services ALLOCATION: Medicaid Services DELETE: $4,900.0 General Fund (1004) EXPLANATION: Prior to the Medicare Part D program implementation, the State paid prescriptions for Medicaid dual-eligibles (enrollees in both Medicaid and Medicare) through Medicaid. With the implementation of Medicare Part D, the state no longer pays for dual eligibles' prescriptions but does help finance them through payments to the federal government. This is commonly referred to as the "Clawback." Payments are based on a per capita cost calculated by the federal government and made on a monthly basis. The state's portion is determined by the Title XIX FMAP rate.  In October 2008, ARRA provided an increase in the State's FMAP rate; it was initially determined that this higher FMAP rate would not apply to the Medicare Part D Clawback payments. On Feb 18, 2010, HHS announced a change to this decision and will now apply the ARRA FMAPs to the Clawback payments. This change will be retroactive to Oct 1, 2008. The State's overpayments of past monthly Clawback will be refunded in the form of a credit to offset future payments. Alaska's credit from Oct 1, 2008 through Dec 31, 2009 is approximately $5.1 million. In addition, future payments will be calculated using the ARRA FMAP and there will be savings from what was originally budgeted for Clawback payments. The savings will be approximately $390,000 per month for the remaining 6 months of SFY 2010 (Jan 1 - June 30, 2010). This is a total of $7.5 million in savings for SFY 2010 from original calculations. These savings will continue through Dec 31, 2010 and are anticipated to be further extended through June 30, 2011 at approx. $414,000 per month for a total SFY2011 savings for $4.9 million over 12 months. Savings for SFY2010 are higher than those for SFY2011 due to the credit from past payments; in effect 21 months of savings are being realized in SFY2010. Co-Chair Stoltze OBJECTED. Co-Chair Hawker explained that Amendment 11 (also related to Medicaid) reflected a change to federal regulation that occurred after the governor's budget was prepared. An adjustment was made to amounts reimbursed to the state under the "Part D" Medicaid prescription drug "Clawback." The state would be receiving an additional federal reimbursement, saving the state from spending $4.9 million in general funds. He reported that the Office of Management and Budget (OMB) had prepared the amendment. Co-Chair Stoltze WITHDREW his OBJECTION. 3:47:27 PM AT EASE 3:48:21 PM RECONVENED There being NO further OBJECTION, Amendment 11 was ADOPTED. Amendment 12 Co-Chair Hawker MOVED to ADOPT Amendment 12. OFFERED BY: Representatives Hawker, Stoltze, Thomas, Austerman, Fairclough, Joule, Kelly, Doogan, Gara DEPARTMENT: Health and Social Services   APPROPRIATION: Office of Children's Services ALLOCATION: Children's Services Management ADD: $165.0 General Funds (1004) ALLOCATION: Front Line Social Workers ADD: $955.3 General Funds (1004) APPROPRIATION: Public Health ALLOCATION: Women, Children and Family Health ADD: $347.8 General Funds (1004) APPROPRIATION: Departmental Support Services ALLOCATION: Administrative Support Services ADD: $700.0 General Funds (1004) ALLOCATION: Information Technology Services ADD: $487.5 General Funds (1004) EXPLANATION: Replace unrealizable interagency and federal receipts due to the loss of Medicaid School Based Claims funding. Reductions totaling $1.5 million in interagency receipts were accepted in the House Finance Subcommittee for the Children's Services Management, Front Line Social Workers, and Women, Children and Health allocations. An increase of $737.5 of general funds was accepted in the House Finance Subcommittee action for the Information Technology Services allocation. These changes total 2,655.6 of general funds. Co-Chair Stoltze OBJECTED. Co-Chair Hawker detailed that Amendment 12 represented an item referred by the subcommittee for full committee consideration related to school-based Medicaid program problems. Some of the funds were not available and the Department of Education and Early Development asked for general funds. He listed services affected, including children's services, front-line social workers, public health, and departmental administrative and support services. He stated that he did not think individual agency components should be punished and that the funds were needed. Co-Chair Stoltze WITHDREW his OBJECTION. There being NO further OBJECTION, Amendment 12 was ADOPTED. 3:51:26 PM Amendment 13 Co-Chair Hawker MOVED to ADOPT Amendment 13: OFFERED BY: Representatives Hawker, Stoltze, Thomas, Austerman, Fairclough, Joule, Kelly, Doogan  DEPARTMENT: Health and Social Services APPROPRIATION:Behavioral Health and Children' Services ALLOCATION: (various, see table below) ADD: $412.5 General Fund/Mental Health (1037) Amount Fund Fund Title Appropriation Allocation