Legislature(2009 - 2010)SENATE FINANCE 532

03/16/2009 01:30 PM Senate FINANCE

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01:40:33 PM Start
01:40:43 PM SB75
02:53:47 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Department of Environmental Conservation
Department of Health and Social Services
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 75                                                                                                            
     "An Act  making and  amending appropriations,  including                                                                   
     capital  appropriations,   supplemental  appropriations,                                                                   
     and appropriations  to capitalize  funds; and  providing                                                                   
     for an effective date."                                                                                                    
1:40:43 PM                                                                                                                    
Co-Chair   Stedman  noted   that   there   were  four   large                                                                   
appropriations  with   allocations  left  to   cover  in  the                                                                   
overview  of SB  75,  including Statewide  Federal  Programs,                                                                   
reference  number 6764,  (pages  51-70); Airport  Improvement                                                                   
Programs,  reference  number 7470,  (pages  71-147);  Surface                                                                   
Transportation Program, $32,610,  (pages 148-229); and Cruise                                                                   
Ship Related Projects, $47,718, (pages 230-241).                                                                                
1:43:57 PM                                                                                                                    
DEPARTMENT OF TRANSPORTATION AND PUBIC FACILITIES (DOT/PF)                                                                    
NANCY SLAGLE, DIRECTOR, DIVISION  OF ADMINISTRATIVE SERVICES,                                                                   
DEPARTMENT   OF   TRANSPORTATION   AND   PUBLIC   FACILITIES,                                                                   
introduced appropriation number  6764 (page 51), $129 million                                                                   
for Statewide  Federal Programs.  The allocations  within the                                                                   
appropriation  include  statewide  transit  systems,  highway                                                                   
safety  programs,  commercial vehicle  enforcement  programs,                                                                   
allocations   used  for  federal   emergency  projects,   and                                                                   
contingency  projects in  the  event of  cost overruns.  Also                                                                   
included   is  $50,760,000   matching   funds  for   highway,                                                                   
aviation, and other projects.                                                                                                   
Ms.  Slagle  described  reference number  7470,  the  Airport                                                                   
Improvement Program,  which includes $316,730,000  in federal                                                                   
receipt  authority,  $16,800,000   in  International  Airport                                                                   
revenue   funds,  $24   million   in  international   airport                                                                   
construction   bond  funds,  and   $4,560,000  in   passenger                                                                   
facility charges  (PFC) collected at international  airports.                                                                   
The Airport  Improvement Program  includes all projects  that                                                                   
the department  believes  will be funded  under the  program,                                                                   
whether through the entitlement  program or through potential                                                                   
discretionary funds that the Federal  Aviation Administration                                                                   
(FAA) may  provide to  the state.  The international  airport                                                                   
projects included those that have  been reviewed and approved                                                                   
by the Air Carriers Association.                                                                                                
1:46:49 PM                                                                                                                    
Senator Olson  asked how much  of the $316 million  was going                                                                   
to Anchorage and Fairbanks. Ms.  Slagle did not know how much                                                                   
was going to  international airports. She pointed  out that a                                                                   
later presentation  would specifically address  international                                                                   
Co-Chair  Hoffman  asked the  current  status  of the  Akutan                                                                   
airport project.                                                                                                                
FRANK  RICHARDS,  DEPUTY  COMMISSIONER,   HIGHWAYS  &  PUBLIC                                                                   
FACILITIES,   DEPARTMENT   OF   TRANSPORTATION   AND   PUBLIC                                                                   
FACILITIES, responded  that the  project was currently  being                                                                   
discussed  with  the  FAA.  He stated  that  there  had  been                                                                   
potential for using economic stimulus  funds for the project,                                                                   
but a limit was being placed at  $15 million per airport; the                                                                   
cost  of  the  Akutan  project  would  be  approximately  $70                                                                   
million.  The department  was continuing  to look at  funding                                                                   
1:49:05 PM                                                                                                                    
Ms. Slagle  continued with a  $344 million appropriation  for                                                                   
the  Surface  Transportation  Program  (page  148,  reference                                                                   
number  32610).  The  amount is  based  on  the  department's                                                                   
Statewide  Transportation  Improvement   Program  (STIP)  and                                                                   
covers  road   projects  and  statewide   projects.  Planning                                                                   
activities  are  included as  well  as highway  projects  and                                                                   
federal highway funds to the ferry system.                                                                                      
Senator Olson queried  the status of a paving  project at the                                                                   
Barrow Airport. Mr. Richards believed  the final phase of the                                                                   
project would be underway the summer of 2009.                                                                                   
Senator  Olson  asked  if  the runway  would  be  moved.  Mr.                                                                   
Richards  responded that  the  runway change  was already  in                                                                   
Senator  Olson asked  if the  project would  open more  lease                                                                   
lots at the airport. Mr. Richards did not know.                                                                                 
Co-Chair Stedman  queried the  relationship between  stimulus                                                                   
funds  and  projects  on  the  Dalton  Highway.  Mr  Richards                                                                   
responded that the two projects,  milepost 274 to 289 and the                                                                   
milepost  7 wayside, were  regular STIP  funded projects  and                                                                   
not included  in the  stimulus package.  The projects  on the                                                                   
stimulus list  were the milepost  175 to 197 project  and the                                                                   
culverts from milepost 260 to 321.                                                                                              
1:53:36 PM                                                                                                                    
Ms. Slagle turned to cruise ship  related projects (page 230,                                                                   
reference number  44718), $16,680,000  in projects  that have                                                                   
been identified  for utilizing cruise ship tax  revenues. The                                                                   
department's regional  staff worked closely  with communities                                                                   
to identify  potential  projects that  the revenues could  be                                                                   
used for. Projects most impacted  by the cruise ship industry                                                                   
were given highest priority.                                                                                                    
Co-Chair Stedman  referred to the process used  for the funds                                                                   
in   past  years   and  noted   funds  that   were  not   yet                                                                   
appropriated. He asked how the  allocations were selected and                                                                   
why  money was  left. Mr.  Richards  stated that  he was  not                                                                   
aware of available  funds related to the cruise  ship tax. He                                                                   
emphasized  that  the  particular projects  were  chosen  for                                                                   
communities  most  directly  impacted   by  the  cruise  ship                                                                   
1:58:27 PM                                                                                                                    
Co-Chair  Stedman noted  that Sitka  was not  on the  project                                                                   
list,  although  up  to three  ships  visited  the  community                                                                   
daily.  He requested  a  list of  the  projects reviewed.  He                                                                   
referred  to  a  balance of  available  funds.  Mr.  Richards                                                                   
replied that the  department would be glad to  share the list                                                                   
of projects considered.                                                                                                         
Senator Thomas  asked if  the department considered  projects                                                                   
in communities  other  than port communities.  He noted  that                                                                   
Fairbanks  gets tourism  traffic  from the  cruise ships  and                                                                   
wondered how the department evaluated impact.                                                                                   
2:01:19 PM                                                                                                                    
Mr.   Richards  replied   that   the  department   considered                                                                   
communities  in  the  interior   that  received  cruise  ship                                                                   
tourists,  including along  the  Parks,  Denali, Dalton,  and                                                                   
Taylor  Highways.   He  explained  that  the   definition  of                                                                   
appropriate   use  for  the   funds  included  any   impacted                                                                   
Senator Thomas asked about funds  that could be used in areas                                                                   
off the  road system that may  not be directly  impacted. Mr.                                                                   
Richards replied  that the project list in  the appropriation                                                                   
bill was compiled with the administration.                                                                                      
Senator Thomas asked if the longer  list would be shared with                                                                   
the committee. Mr. Richards responded in the affirmative.                                                                       
Co-Chair Stedman  wanted the list  to include the  main ports                                                                   
of Sitka,  Ketchikan, Juneau,  and Skagway.  He noted  a line                                                                   
item for  Ketchikan but none for  Sitka. He wanted  a longer-                                                                   
term objective  of developing  a reasonable  way to  allocate                                                                   
funds on-going,  so that impacted communities  could plan for                                                                   
larger projects.                                                                                                                
Ms. Slagle  noted that  the Office  of Management and  Budget                                                                   
(OMB) would respond on the issue of the available funds.                                                                        
2:04:30 PM                                                                                                                    
Ms.  Slagle   concluded  with   a  request  (page   241)  for                                                                   
$26,300,000  to take out  sharp curves  and correct  drainage                                                                   
and poor surface  conditions on the Dalton  Highway, milepost                                                                   
9 to 11.                                                                                                                        
Mr. Richards  explained that the  project had  been discussed                                                                   
during the 2009 summer special  session. He asked for support                                                                   
for the project.                                                                                                                
Co-Chair Hoffman asked how the  revenue source was determined                                                                   
for the  project. Ms.  Slagle replied  that the decision  was                                                                   
made by governor's office and not the department.                                                                               
Co-Chair Stedman  noted a lack  of continuity  regarding some                                                                   
of the  fund sources,  and that  the committee would  address                                                                   
2:06:12 PM                                                                                                                    
Senator Huggins  mentioned a  mid-November DOT/PF  meeting in                                                                   
Anchorage  during which  projects related  to gas  activities                                                                   
were described.  He asked  for a  copy of  the list  of items                                                                   
compiled at the meeting. Mr. Richards  informed the committee                                                                   
that the  department had  completed a report  with a  list of                                                                   
gasline related  projects submitted to DOT/PF  by communities                                                                   
and other entities such as the  Matanuska-Susitna Borough and                                                                   
the Alaska Railroad Corporation.                                                                                                
Senator Huggins  did not think  the projects were  integrated                                                                   
into  the  current  list. Mr.  Richards  responded  that  the                                                                   
capital  budget  was developed  in  early and  mid-fall;  the                                                                   
discussion with  the communities took place after  the budget                                                                   
was  submitted.  The  budget   package  included  the  Dalton                                                                   
Highway  project, which  the  department  had deemed  gasline                                                                   
Senator  Huggins pointed  out that  the department  scheduled                                                                   
the meetings for November, not  the communities. He expressed                                                                   
disappointment  that  the  meeting was  scheduled  after  the                                                                   
communities could make application  for the list, and accused                                                                   
the department of deception.                                                                                                    
2:08:21 PM                                                                                                                    
Mr. Richards summarized that the  general fund portion of the                                                                   
capital budget was approximately  $93.5 million, with a great                                                                   
reliance  on  federal  programs for  highway,  aviation,  and                                                                   
Co-Chair   Stedman  commented   that   the  budget   included                                                                   
approximately $729 million in  federal funds and $234 million                                                                   
in state funds, for a total of  around $942 million. He noted                                                                   
that  the  totals  did  not  include  the  economic  stimulus                                                                   
2:09:22 PM     AT EASE                                                                                                        
2:12:24 PM     RECONVENED                                                                                                     
DEPARTMENT OF ENVIRONMENTAL CONSERVATION (DEC)                                                                                
LARRY DIETRICK,  DIRECTOR, DIVISION  OF SPILL PREVENTION  AND                                                                   
RESPONSE, DEPARTMENT OF ENVIRONMENTAL  CONSERVATION, detailed                                                                   
item  number  46946,  $750,000  for  the  Oil  and  Hazardous                                                                   
Substance   First   Responder  Equipment   and   Preparedness                                                                   
project.  He explained  that  funds  from the  response  fund                                                                   
would go  for first responder  equipment at the  local level.                                                                   
The  department cannot  be in  all communities;  it works  to                                                                   
empower communities  through formal  response agreements  and                                                                   
provides equipment  and training. The equipment  includes oil                                                                   
spill  response   equipment  tailored   for  each   community                                                                   
according  to   local  resources   and  needs.  Examples   of                                                                   
equipment  provided  include  boom  recovery  skimmers,  fast                                                                   
tanks, field detection gear, and  hazardous material gear. He                                                                   
provided specific examples of equipment used.                                                                                   
Mr. Dietrick  turned to reference number  33826, Contaminated                                                                   
Sites Cleanup, $5  million from the response fund  to be used                                                                   
for assessment, cleanup, and monitoring of 31 sites.                                                                            
BILL GRIFFITH, FACILITY PROGRAMS  MANAGER, DIVISION OF WATER,                                                                   
DEPARTMENT OF ENVIRONMENTAL CONSERVATION,  explained that the                                                                   
division's  two capital appropriation  requests would  assist                                                                   
in  protecting  public health  in  Alaska by  increasing  the                                                                   
number of  rural households  with basic sanitation  services,                                                                   
and  assist  communities  with existing  systems  to  address                                                                   
aging  infrastructure,   community  growth,   and  regulatory                                                                   
Mr.  Griffith explained  the first  appropriation,  reference                                                                   
number  41376, $91,666,660  for  the Village  Safe Water  and                                                                   
Wastewater  Infrastructure   Projects.  There   are  multiple                                                                   
allocations  for  statewide  water   and  wastewater  capital                                                                   
improvement projects.  Funding for the request is  made up of                                                                   
$52,125,000 in federal receipts,  $14,410,598 in general fund                                                                   
match,  $25  million  in  general   funds,  and  $500,000  in                                                                   
statutory   designated   funds.   Seventy-three   allocations                                                                   
include 12 planning  projects for $1.25 million,  56 projects                                                                   
on the three-year  priority list for $75.6 million,  3 design                                                                   
and  construction projects  not  included  on the  three-year                                                                   
priority  list  for  $4.3  million,   $500,000  in  statutory                                                                   
designated  receipt authority,  and  $10  million in  federal                                                                   
receipt  authority   for  projects   funded  by   the  Denali                                                                   
Commission  and  the  Indian  Health  Service.  Mr.  Griffith                                                                   
reminded the committee that the  three-year priority list was                                                                   
established  according to  federal  funding requirements  and                                                                   
must be used to fund large multi-year projects.                                                                                 
2:18:36 PM                                                                                                                    
Co-Chair Stedman added that there  was $25 million in general                                                                   
funds and an  additional $14,000 in general  fund match, with                                                                   
a  total  of $39  in  state  funds.  He asked  what  was  not                                                                   
selected from the  three-year priority list of  items and how                                                                   
much additional  state  money would be  required to  complete                                                                   
all  the items.  He  asked if  the three-year  priority  list                                                                   
would change over time.                                                                                                         
Mr.  Griffith  reported  that there  was  approximately  $256                                                                   
million in estimated project cost  on the three-year priority                                                                   
list. The department  hoped to accomplish around  $75 million                                                                   
worth of work on  the list in the coming year.  He added that                                                                   
communities  have  an  opportunity  to apply  each  year  for                                                                   
project funds that may place them  on the three-year priority                                                                   
list, if  the projects are  large and multi-year.  Therefore,                                                                   
projects could  be added over  the coming year;  however, few                                                                   
projects have  been added in  recent years as  the department                                                                   
hopes to complete the projects already on the list.                                                                             
2:20:52 PM                                                                                                                    
Mr. Griffith  described the  second appropriation,  reference                                                                   
number  46714, $23,189,396  for Municipal  Water, Sewage  and                                                                   
Solid Waste Facilities Grants.  The appropriation consists of                                                                   
16 allocations  for individual  projects to be  funded solely                                                                   
with  state   general  funds.  The  projects   are  municipal                                                                   
matching grant projects; a portion  of the costs will be paid                                                                   
by  grant  recipients,   which  consist  of   larger  cities.                                                                   
Projects  included   on  the   list  must  be   requested  by                                                                   
communities  and  scored  and  prioritized  using  the  state                                                                   
municipal matching grant questionnaire process.                                                                                 
Co-Chair  Stedman returned  to  the safe  water projects  and                                                                   
asked  if  the  Kodiak  item would  still  be  first  on  the                                                                   
priority  list in another  year. Mr.  Griffith answered  that                                                                   
the list would be different each  year; communities re-submit                                                                   
projects based on current needs and funding resources.                                                                          
Co-Chair  Stedman  asked for  an  overview  of how  the  list                                                                   
changes  from year  to year,  and referred  to an  additional                                                                   
$60.7  million in  requests  from communities.  Mr.  Griffith                                                                   
estimated  that roughly half  the list  changes from  year to                                                                   
year because projects might be  funded through grants, loans,                                                                   
or federal  appropriations; needs or regulatory  requirements                                                                   
might change.                                                                                                                   
Co-Chair Stedman asked a question regarding an item.                                                                            
MIKE MAHER,  DIRECTOR, DIVISION  OF ADMINISTRATIVE  SERVICES,                                                                   
DEPARTMENT OF ENVIRONMENTAL CONSERVATION,  responded that the                                                                   
item represented Alaska Housing  Finance Corporation receipts                                                                   
and that the funding source was proposed by OMB.                                                                                
2:24:55 PM                                                                                                                    
Co-Chair  Stedman  requested details  regarding  the  general                                                                   
fund  match  and  the general  fund  designation  related  to                                                                   
village  safe water  infrastructure.  Mr.  Maher thought  the                                                                   
match was a  little over $14 million. The governor  added $25                                                                   
million in  straight general funds  in an effort to  keep the                                                                   
level of funding for the program at roughly 40 percent.                                                                         
Co-Chair   Stedman   referred   to  the   Ketchikan   project                                                                   
allocation  (page 92)  for $1.4 million,  and commented  that                                                                   
the funds might  be insufficient to complete  the project. He                                                                   
asked  if the  administration supported  funding the  project                                                                   
Mr.  Griffith  asked  for  clarification.   Co-Chair  Stedman                                                                   
stated that  the request  is short  $363,310, according  to a                                                                   
letter from the borough manager.  He read from the letter and                                                                   
asked  the  administration's stance.  Mr.  Griffith  answered                                                                   
that  the  department  absolutely supports  the  project.  He                                                                   
offered to get further clarification  regarding the shortage.                                                                   
The  department   is  working  with  other   federal  funding                                                                   
agencies and looking  at other potential sources  to complete                                                                   
the project. He noted that the  project is large and complex;                                                                   
the water  line extension to Mountain  Point is tied  in with                                                                   
water  treatment  plan  improvements  and  has  a  number  of                                                                   
different phases.                                                                                                               
2:28:36 PM                                                                                                                    
Co-Chair  Stedman commented  that he  wanted to move  forward                                                                   
with projects that could be completed.                                                                                          
2:29:32 PM     AT EASE                                                                                                        
2:31:58 PM     RECONVENED                                                                                                     
DEPARTMENT OF HEALTH AND SOCIAL SERVICES (DHSS)                                                                               
ARNOLD  LIEBELT,  FACILITIES SERVICES  MANAGER,  FINANCE  AND                                                                   
MANAGEMENT   SERVICES,  DEPARTMENT   OF  HEALTH  AND   SOCIAL                                                                   
SERVICES, began  with the highest priority item,  the Johnson                                                                   
Youth Center Renovation  and Remodel, Phase One.  The project                                                                   
expected  to meet  safety and  security  needs. He  explained                                                                   
that  the department  had put  together a  long-term plan  in                                                                   
2007 to address safety and security  deficiencies at the four                                                                   
oldest  youth facilities,  the  Johnson, McLaughlin,  Bethel,                                                                   
and  Fairbanks facilities.  He  directed the  committee to  a                                                                   
report  outlining the  needs of the  facilities and  detailed                                                                   
money that had  been received and improvements  that had been                                                                   
Mr. Liebelt added that the current  request would further the                                                                   
long-term  plan  by funding  the  first  of three  phases  of                                                                   
improvements  to  the  Johnson   Youth  Center,  including  a                                                                   
complete rehabilitation  of the existing  eight-bed detention                                                                   
ALISON ELGEE, ASSISTANT COMMISSIONER,  FINANCE AND MANAGEMENT                                                                   
SERVICES,   DEPARTMENT  OF   HEALTH   AND  SOCIAL   SERVICES,                                                                   
described  the   next  priority   request  as  the   Medicaid                                                                   
Management Information System  Completion. The department has                                                                   
been developing  a new information system for  several years.                                                                   
The request is based on an approved  project budget submitted                                                                   
to  the   federal  government   totaling  approximately   $46                                                                   
million.  Recently, the  department has  discovered that  the                                                                   
federal government had disallowed  approximately $4.5 million                                                                   
of the total  project cost for federal  reimbursement because                                                                   
of  an earlier  failed attempt.  The total  project is  still                                                                   
anticipated to  require the  original project budget  amount;                                                                   
however, the federal receipts  that will not be received must                                                                   
be replaced with  general funds. In addition,  the difference                                                                   
between the  project budget  and the original  appropriations                                                                   
must  be  made  up.  She reported  that  the  project  is  on                                                                   
schedule to be completed in May 2010.                                                                                           
2:36:28 PM                                                                                                                    
Mr.  Liebelt turned  to reference  number 31862,  Non-Pioneer                                                                   
Home Deferred  Maintenance Renovation, Repair  and Equipment,                                                                   
for $2,203,000, listed in priority order.                                                                                       
Mr. Liebelt described  reference number 37934:  $2 million in                                                                   
general  funds  for the  Pioneer  Home  Deferred  Maintenance                                                                   
project. The project is for six  Alaska pioneer homes, listed                                                                   
in priority order.                                                                                                              
Co-Chair  Stedman  queried  the  expected  condition  of  the                                                                   
buildings after  the on-going maintenance was  completed. Mr.                                                                   
Liebelt answered that the answer  depends on the type and use                                                                   
of the building.  The oldest home is the Sitka  Pioneer Home;                                                                   
the  newer  buildings  are  in   better  shape.  The  24-hour                                                                   
facilities, such  as the youth facilities and  pioneer homes,                                                                   
require higher  use. The public  health centers and  labs and                                                                   
the  behavior   health  centers  tend  to  wear   better.  He                                                                   
described criteria used to establish the priority list.                                                                         
Mr. Liebelt  turned to reference  number 32446,  $1.1 million                                                                   
for Safety and  Support Equipment for Probation  Officers and                                                                   
Front Line Workers. The request  is department wide and would                                                                   
benefit  the Division  of  Juvenile  Justice,  the Office  of                                                                   
Children's Services,  the Division of Public  Assistance, and                                                                   
the Division  of Senior and  Disabilities Services.  He noted                                                                   
that the request  is made annually and is for  one-time types                                                                   
of   equipment  needed   to   serve  clients   and   continue                                                                   
2:38:51 PM                                                                                                                    
Mr. Liebelt  discussed reference  number 46898, $474,300  for                                                                   
Production Printer Replacement.  The item would provide for a                                                                   
heavy-use  production printer  with a three-year  maintenance                                                                   
contract for  the Division of  Public Assistance.  Each month                                                                   
the   printer    generates   approximately    70,000   client                                                                   
notifications, 10,000  identification cards, and  hundreds of                                                                   
medical  authorizations.   The  current  printer   is  nearly                                                                   
Mr.  Liebelt   described  reference   number  46905,   Online                                                                   
Resources for the Children of  Alaska (ORCA), Enhancements to                                                                   
Meet Federal Requirements. The  Office of Children's Services                                                                   
has 29 offices;  the request would implement  one centralized                                                                   
state-wide  intake office.  In  addition,  the request  would                                                                   
include  funding to  collect  required information  to  track                                                                   
children transitioning from foster care.                                                                                        
Mr.  Liebelt  moved  to  reference   number  46911,  $500,000                                                                   
general  funds for  Public  Health Disaster  Preparedness  to                                                                   
purchase equipment and supplies in case of a disaster.                                                                          
Mr. Liebelt  covered reference  number 39148, $41,400  for E-                                                                   
Grants, the  department's web-based  management solution.  E-                                                                   
Grants is currently  capable of generating various  data, but                                                                   
there are  missing components,  including one for  completing                                                                   
online  applications.   An  electronic  depository   for  all                                                                   
records connected with applications would also be created.                                                                      
2:42:29 PM                                                                                                                    
Mr.  Liebelt turned  to  reference  number 42837,  an  annual                                                                   
request  for  $425,000  general  funds  to  match  Code  Blue                                                                   
Project funds from regional Emergency Medical Services.                                                                         
Co-Chair Stedman  commented on the  success of the  Bring the                                                                   
Kids Home  project. Mr. Liebelt  detailed item 38923  for the                                                                   
program. The requested $2.2 million  would match $2.2 million                                                                   
expected from  the Denali  Commission and  would be  used for                                                                   
Mr.  Liebelt  described  reference  number  33443,  Emergency                                                                   
Medical Services  Emergency Communications.  He responded  in                                                                   
the negative  to a  question from  Senator Huggins  regarding                                                                   
fund sources. Mr. Liebelt detailed  that the $190,000 request                                                                   
for  general  funds  would  cover   assessment,  repair,  and                                                                   
replacement costs for the existing  legacy systems of the VHF                                                                   
radio base stations and repeaters.                                                                                              
2:44:50 PM                                                                                                                    
Mr. Liebelt  explained reference  number 33670, $750,000  for                                                                   
Mental   Health  Deferred   Maintenance   and   Accessibility                                                                   
Improvements. The request, which  has been asked for in years                                                                   
past, is a  capital grant program. Capital funds  are awarded                                                                   
to non-profit agencies serving  trust beneficiaries for large                                                                   
deferred maintenance accessibility projects.                                                                                    
Mr. Liebelt turned to reference  number 33671, $1,050,000 for                                                                   
Mental  Health Housing,  Home  Modification  and Upgrades  to                                                                   
Retain Housing.  The project awards  capital funds  through a                                                                   
competitive  process  to  non-profit agencies  that  in  turn                                                                   
awards grants  to individuals. Up  to $15,000 is  awarded for                                                                   
modifications  to owner-occupied  homes  (up  to $12,000  for                                                                   
non-owner occupied).                                                                                                            
Ms.  Elgee   described  item   47611  for  Health   Insurance                                                                   
Portability   and   Accountability    Act   (HIPAA)   Updated                                                                   
Electronic Transaction Standards.  The department proposes to                                                                   
update  while it  is still  operating under  the Legacy  MMIS                                                                   
system in order to receive federal  funds for capital project                                                                   
upgrades. The federal government  will participate 90 percent                                                                   
in  the  upgrades  under  the  existing  legacy  system;  the                                                                   
department does  not believe the rate  would be as high  at a                                                                   
later date.                                                                                                                     
Ms.  Elgee   presented  five   information  technology   (IT)                                                                   
projects included  under a  governor's office  appropriations                                                                   
structure that was slightly different than past years.                                                                          
   · Reference number 46920: Personal Information Protection                                                                    
     Data Encryption.  The project is designed  to meet HIPAA                                                                   
     standards  for  internal  information within  the  state                                                                   
     system  and would  allow the department  to encrypt  the                                                                   
     data while it is moving through the system.                                                                                
   · Reference number 46944: Behavioral Health Data Sharing                                                                     
     Partnership  Project, an expansion  of the scope  of the                                                                   
     Alaska Information Management  System. The project would                                                                   
     allow the Division of Behavioral  Health to increase its                                                                   
     ability to  make database  decisions to move  forward in                                                                   
     performance-based  funding by  allowing the division  to                                                                   
     interface  with  existing  systems  such  as  electronic                                                                   
     medical records and the court and corrections systems.                                                                     
   · Reference number 46918: $1,337.400 for a HIPAA                                                                             
     compliance    project.   The   department    anticipates                                                                   
     continuing the  project until 2013, when it  hopes to be                                                                   
     in federal  compliance. She pointed out  that failure to                                                                   
    comply could result in extreme financial penalties.                                                                         
2:49:53 PM                                                                                                                    
   · Reference number 46921: $409,000 for the Disaster                                                                          
     Recovery  Project, which  would provide  a failsafe  for                                                                   
     the department's  IT system  in the  event of  a natural                                                                   
     disaster.  The  project  would assess  the  critical  IT                                                                   
     systems  already  operating  and implement  a  plan  for                                                                   
     providing function during an emergency.                                                                                    
   · Reference number 46904: Contract Management Automation                                                                     
     System. The project would be similar to E-grants.                                                                          
Senator Thomas  asked for  clarification regarding  the HIPAA                                                                   
requirements.  Ms.  Elgee  answered   that  every  aspect  of                                                                   
business that  includes private health records  is subject to                                                                   
HIPAA compliance.  The department's  project is designed  for                                                                   
health  records  within  the purview  of  the  Department  of                                                                   
Health  and   Social  Services.   Senator  Thomas   expressed                                                                   
concerns about  future requirements.  Ms. Elgee referred  him                                                                   
to the HIPAA compliance coordinator.                                                                                            
2:53:47 PM                                                                                                                    
SB  75   was  HEARD  and   HELD  in  Committee   for  further                                                                   

Document Name Date/Time Subjects
DEC Rural Sanitation Historical Approps 1.26.09.pdf SFIN 3/16/2009 1:30:00 PM
SB 75
DEC Muni Match List FY2010.pdf SFIN 3/16/2009 1:30:00 PM
SB 75
DEC Rural Sanitation Needs.pdf SFIN 3/16/2009 1:30:00 PM
SB 75
DEC VSW & Muni Match Prgs.pdf SFIN 3/16/2009 1:30:00 PM
SB 75
DEC VSW Fed Rept Authority.pdf SFIN 3/16/2009 1:30:00 PM
SB 75
DEC VSW List FY2010.pdf SFIN 3/16/2009 1:30:00 PM
SB 75
DEC Water and Sewer Service Rates 2 6 2009.pdf SFIN 3/16/2009 1:30:00 PM
SB 75