HOUSE BILL NO. 266 "An Act making appropriations for the operating and loan program expenses of state government and for certain programs, capitalizing funds, and making reappropriations; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund." HOUSE BILL NO. 267  "An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program." 2:26:16 PM ^FY15 BUDGET OVERVIEW: DEPARTMENT OF LAW 2:26:21 PM MICHAEL GERAGHTY, ATTORNEY GENERAL, DEPARTMENT OF LAW, began the PowerPoint presentation, "Department of Law FY15 Budget Overview." He spoke to Slide 2: Mission:  The Alaska Department of Law prosecutes crime and provides legal services to state government for the protection and benefit of Alaska's citizens. Core Services  · Protecting the safety and financial well-being of Alaskans · Fostering conditions for responsible development of our natural resources · Protecting the fiscal integrity of the State of Alaska · Promoting good governance Mr. Geraghty turned to Slide 3, which contained a departmental organizational chart outlaying the three divisions: Criminal, Administrative Services, and Civil. Mr. Geraghty spoke to Slide 4, which listed the FY15 operating budget requests by division. The department would be taking a 5percent reduction in general funding from FY14. Mr. Geraghty continued to Slide 5, which contained a bar graph showing the percentage of the total department's budget by fund group. The percentage of general funds (UGF&DGF) in the Department of Law's budget was 64 percent in FY06 and is 68 percent in the FY15 governor's request. 2:28:55 PM Mr. Geraghty spoke to Slide 6, "Key Statistics." The slide listed planned personnel reductions, the bulk of which would be the loss of 6 attorneys and 1 law office assistant. The attorneys were divided between the criminal and civil division and three of the positions were currently vacant. He thought that remaining attorneys could work across divisions. 2:31:41 PM Mr. Geraghty turned to Slide 7, which showed the department's share of total agency operations. The department's general fund budget grew by $19.1 million between the FY06 and FY15 governor's requests, an average annual growth rate of 4.1 percent. The department's total FY15 governor's request general fund budget equaled $191 per resident worker. In FY08, the department's percentage of all agency overall operations was 1.1 percent, and had been as high as 1.5 percent in FY12. In FY15, projections were at 1.2 percent. The main reason the department's budget had fluctuated was because of the need to use Outside Counsel for cases such as BP Corrosion, TAPS and the Fast Ferries. Personal services had increased $25.5 million between FY06 and FY14. 2:33:00 PM Representative Gara inquired what the blue line across the bars represented. Mr. Geraghty responded that he was unsure. 2:33:42 PM DAVE BLAISDELL, DIRECTOR, ADMINISTRATIVE SERVICES DIVISION, DEPARTMENT OF LAW, interjected that the red lines represented the total agency budget of $63 million. He added that the blue line represented the percentage of agency budget to total state agencies budgets. 2:34:33 PM Mr. Geraghty continued to Slide 8, which showed the continued budget growth compared to the 10-year plan for all funds. He shared that spikes for the department were the result of large cases such and BP Corrosion, TAPS, and Point Thomson. The flatter growth curve in out years did not project any of those cases. Mr. Geraghty said that Slide 9 reflected the same comparison using only general funds. Mr. Geraghty addressed Slide 10, which was a pie chart detailing personal services as 75 percent of the department's budget. 2:35:53 PM Mr. Geraghty directed committee attention to Slide 11, which listed the adjustments to the FY14 management plan that would be needed to arrive at the base. He said that one-time items had been removed and statewide items had been re-added. 2:36:40 PM Mr. Geraghty spoke to Slide 12, which showed the increments that had been added back in and the deletion of the 7 aforementioned positions. Reduced expenditure levels were 1.5 percent of the total budget. He said that the department would work to curb the use of outside council and to improve vacancy rate management. He noted that there were two attorney positions that were partially funded by the Department of Corrections. 2:40:05 PM Mr. Geraghty turned to Slide 13. The slide contained a pie chart that broke down the priority programs as a percentage of the budget FY15 management plan. Mr. Geraghty directed committee attention to Slide 14, which listed the numbers for the FY15 priority programs totaling $93,458.4. Mr. Geraghty addressed Slide 15, which listed the return on investment for the Civil Division budgets in FY12 and FY13. 2:42:27 PM Mr. Geraghty continued to the individual topics pictured on Slides 16 through 24. He said that between 2010 and 2012, the state had 6 convictions for Medicaid fraud. Since 2012, the state had had 72 cases charged, 44 convictions, restitution judgments in excess of $225,000, 21 cases were pending with restitution expected between $1 million and $3 million. He said that Medicaid providers had been suspended and payments had been suspended for claims that were under suspicion. Mr. Geraghty shared that in summer of 2013 he had instituted a change in the department's plea negotiation policy, mostly for serious crimes, which eliminated the ability of the persecutor and the defense attorney to agree on a sentence resulting in the case having to be resolved by a judge. He believed that the policy chance had been successful. 2:46:31 PM Mr. Geraghty spoke to the backlog of appeals. He said that in the court of criminal appeals had a significant backlog of appeals that had built up over the past few years. He shared that currently, between the time between when a notice of appeal was filed and the briefing was completed was approximately 500 days. He said that many of the appeals were sentence appeals and could be handled by civil attorneys. 2:49:56 PM Mr. Geraghty moved on to the issue of the Voting Rights Act. He said that the state had challenged the coverage formula provision, which had required the state to pre- clear all election changes before they could be implemented. The case was dismissed with the Department of Justice agreeing that the requirements were null. The effort should reduce the re-appointment fights in the future, which should result in saving to the state. He continued to the Katie John case. He stated that an amicus brief had been filed by 14 states in support of Alaska's Certiorari Petition, which he believed spoke to the merits of the case and the issue of encroachment of federal authority on state's rights. 2:51:16 PM Mr. Geraghty spoke to the Endangered Species Act. He related that the major species implicated were the polar bear and the bearded seal. He relayed that the state had won the critical habitat case before the district court. The critical habitat established by the National Marine Fisheries Service (NMFS) covered 187,000 square miles of the state; the rule was currently on appeal to the 9th circuit. He spoke to the challenge of the bearded seal designation, which was based by NMFS on a 100 year model. He hoped for a decision in the current year. He said that the stellar sea lion was still designated that litigation would most likely resume on the issue. 2:53:05 PM Mr. Geraghty opined that Alaska's right to access and manage land was an ongoing issue. He spoke to the case of John Sturgeon who was prohibited from using a hovercraft inside the Yukon-Charley Rivers National Preserve. He said that the state was appealing the case with Mr. Sturgeon, and that other cases were pending. He stated that the Roadless Rule continues to be litigated as well as the Lease Sale 193 among others. 2:55:18 PM Mr. Geraghty discussed consumer protection. He shared that he was working on the issue of on-board port shopping programs that were nefarious and unethical. He said that a consent decree had been negotiated with the three on-board promotion companies that served the cruise lines working in Alaska. 2:59:33 PM Mr. Geraghty spoke to Slide 24, which listed challenges faced by the department: · Increases in the number of criminal cases brought to trial · Increased facility costs · Gasline funding · Elections issues in 2014 · Effective use of outside counsel Mr. Geraghty said that in 2011 the department tried 130 cases in Anchorage, 2012 148 cases were tried, and in 2013 176 cases were tried. He stated the all of the state offices in Western Alaska faced challenges, but that Bethel was the priority. He relayed that the Fairbanks office had been moved, which had added expense. He listed other facility challenges. 3:03:57 PM Co-Chair Stoltze expressed appreciation for the department's work on victim's rights. Mr. Geraghty replied work would continue on the issue. 3:06:26 PM Co-Chair Stoltze inquired what the relevance was of telling the committee what percentage his department's budget was of the total agency budgets. Mr. Geraghty thought that it was useful to track what percentage of a state budget an agency spent. Co-Chair Stoltze did not appreciate the departmental comparisons. 3:08:32 PM Co-Chair Austerman commented that past chairmen had found the information helpful. Co-Chair Stoltze agreed that the charts could be useful. Co-Chair Stoltze queried the return on investment for successful cases and agency advice. Mr. Geraghty said that it was hard to quantify. 3:11:07 PM Co-Chair Stoltze said that he was speaking to federal litigation. Mr. Geraghty reiterated that it was hard to quantify. 3:12:25 PM Representative Costello asked for Mr. Geraghty's opinion on the amount of time and energy the state spent dealing with issues related to federal overreach. Mr. Geraghty replied that the department spent a lot of time dealing with the issues. He shared that much time had been spent on the Pebble Mine issue. He spoke again to the Sturgeon Case. He thought that it would be hard to measure the time spent, but that it was an ongoing battle. 3:14:54 PM Representative Costello requested a short overview of the status of the RS2477 issue. Mr. Geraghty responded that the district court judge granted a summary judgment to the native allotment holders that were involved in some of the trails in the Chicken area. He stated that the judge believed that it was an issue that should be decided by the 9th circuit. 3:16:44 PM Co-Chair Stoltze thought that the issue would be better addressed by the Citizens Advisory Committee on Federal Areas. Mr. Geraghty said that the Chicken claims were the main cases the state was dealing with, but that there were more, smaller cases that the department was handling. 3:18:03 PM Vice-Chair Neuman probed the issue of Medicaid fraud. He understood that the department recovered $1 million to $3 million per year. Mr. Geraghty replied that there were 21 cases pending where the restitution available would be $1 million to $3 million. Vice-Chair Neuman asked where the recovered funds would be used. Mr. Geraghty said that the funds would be returned to the Department of Health and Social Services (DHSS). Vice-Chair Neuman understood that the department saved $15 million per year by discovering Medicaid fraud. Mr. Geraghty replied that when there was credible evidence of fraud DHSS would suspend payment. He said that in those cases the projected money saved was $15 million. 3:21:03 PM Representative Gara commented that the number of non- violent offenders in prison had grown significantly. He asked whether the department could work with the Department of Corrections and the governor in order to compose a list of criminal sentences and misdemeanors that had been changed to felonies, but were non-violent crimes, that could be examined in order to reduce the prison population. Mr. Geraghty thought that the problem was multi- dimensional. He said that studies had shown that one-third of defendants would not reoffend, another third would reoffend no matter how much help they received, and the final third rested in the middle. He said he would be happy to study the issue. 3:25:13 PM Representative Gara thought that there had been a substantial increase in the non-violent offenders. He requested that a hard look be taken in order to find solutions. Mr. Geraghty assured the committee that the issue would be examined. Representative Gara discussed the department's plea policy. He requested assurance that the policy was fair and equitable. Mr. Geraghty that there were exceptions to the policy for individual case reviews. Representative Gara asked what would happen if a person did not commit the crime. Mr. Geraghty said that if the person did not commit the crime then they would not go to trial. He countered that if the person did commit the crime, there should be no fear of taking it to trial. 3:29:49 PM Representative Munoz expressed appreciation for the work done by the department. 3:30:50 PM HB 266 was HEARD and HELD in committee for further consideration. HB 267 was HEARD and HELD in committee for further consideration. Co-Chair Austerman discussed housekeeping.