Legislature(2015 - 2016)SENATE FINANCE 532

01/28/2016 09:00 AM Senate FINANCE

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09:11:30 AM Start
09:12:32 AM SB140
09:12:35 AM Presentation: Mental Health Budget
10:50:29 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
+ Presentation: Jeff Jessee, Chief TELECONFERENCED
Executive Officer Alaska Mental Health
Trust Authority
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 140                                                                                                           
     "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."                                                                                                        
9:12:32 AM                                                                                                                    
^PRESENTATION: MENTAL HEALTH BUDGET                                                                                           
9:12:35 AM                                                                                                                    
RUSS WEBB,  CHAIR, BOARD OF  TRUSTEES, ALASKA  MENTAL HEALTH                                                                    
TRUST  AUTHORITY,  introduced   himself.  He  discussed  the                                                                    
PowerPoint,  "Trust: Alaska  Mental  Health Trust  Authority                                                                    
(AMHTA)." He looked at slide 2, "Trustees":                                                                                     
     •Russ Webb, chair                                                                                                          
     •Mary Jane Michael, vice chair                                                                                             
     •Larry Norene, secretary                                                                                                   
     •Laraine Derr                                                                                                              
     •Paula Easley                                                                                                              
     •Carlton Smith                                                                                                             
Mr. Webb looked at slide 3, "Trust Beneficiaries":                                                                              
     Approximate Number of Trust Beneficiaries                                                                                  
          Mental Illness: 34,000                                                                                                
          Developmental Disabilities: 13,000                                                                                    
          Chronic Alcoholism/Substance-Related Disorders:                                                                       
          Alzheimer's disease and related dementias: 6,000                                                                      
          Traumatic Brain Injury: 11,000                                                                                        
Senator  Hoffman  wondered  whether the  beneficiaries  were                                                                    
mostly located in Fairbanks, Anchorage,  and Juneau, or were                                                                    
they  located throughout  the state.  Mr. Webb  replied that                                                                    
the slide related to the  number of people with a condition,                                                                    
not  the number  of  people served.  He  furthered that  the                                                                    
numbers  served  would  be significantly  smaller  than  the                                                                    
displayed numbers.  He explained that  Fairbanks, Anchorage,                                                                    
and  Juneau  contained  the  highest  populations,  but  the                                                                    
numbers represented people throughout Alaska.                                                                                   
Co-Chair MacKinnon asked whether there  was a way to overlay                                                                    
the beneficiaries  and those who  qualify for  Medicaid. Mr.                                                                    
Webb  responded  that there  was  an  assessment within  the                                                                    
behavioral  health system,  and  deferred  to Department  of                                                                    
Health  and  Social  Services (DHSS)  for  more  information                                                                    
about an estimate.                                                                                                              
Mr. Webb discussed slide 4, "Established Focus Areas":                                                                          
     1. Disability Justice                                                                                                      
     2. Substance Abuse Prevention and Treatment                                                                                
     3. Beneficiary Employment and Engagement                                                                                   
     4. Workforce Development                                                                                                   
     5. Housing and Long-term Services and Supports                                                                             
9:17:58 AM                                                                                                                    
JEFF  JESSEE,  CHIEF  EXECUTIVE  OFFICER,  AMHTA,  displayed                                                                    
slide 5, "What is the  Mental Health Budget Bill?" He stated                                                                    
that the presentation  would offer a high  level overview of                                                                    
the  Mental  Health  Bill,  its   purpose,  value,  and  its                                                                    
Mr.  Jessee  highlighted  slide  6,  "Mental  Health  Budget                                                                    
     1. General Fund/Mental Health Base                                                                                         
     2. Capital Budget                                                                                                          
     3. Mental Health Trust Authority Authorized Receipts                                                                       
Mr.  Jessee  explained that,  at  the  time of  the  state's                                                                    
settlement,  there  was   no  comprehensive  and  integrated                                                                    
mental  health  system.  There  was  a  fragmented  delivery                                                                    
system  to the  beneficiaries. He  explained that,  once the                                                                    
mental  health bill  is delivered  to  the legislature,  the                                                                    
bill is  changed significantly. He stated  that there should                                                                    
be  a discussion  regarding how  the separate  budgets would                                                                    
interface. He  stated that Medicaid and  justice reform must                                                                    
be  integrated into  the mental  health budget.  He stressed                                                                    
that the bill is intended to provide a "big picture."                                                                           
Mr. Jessee  addressed slide  7, "General  Fund/Mental Health                                                                    
     •Amount is established by identifying the mental                                                                           
    health services funded within the state's GF budget                                                                         
     •These funds are designated as GF/MH                                                                                       
     •Final   budget   from   the   previous   fiscal   year                                                                    
     establishes the base                                                                                                       
9:22:59 AM                                                                                                                    
Co-Chair  MacKinnon  queried  the power  to  define  "mental                                                                    
health."  Mr. Jessee  replied  that  the beneficiary  groups                                                                    
were set  by the judge  during the litigation.  He explained                                                                    
that the  litigation, and the  reason for the  definition of                                                                    
"mental health."  He stated that individuals  with traumatic                                                                    
brain injuries were recently added  to the list of qualified                                                                    
9:27:43 AM                                                                                                                    
Co-Chair Kelly  stated that there  had been  recent research                                                                    
of the history of Morningside.                                                                                                  
Mr.  Jessee  stated  that there  were  some  individuals  at                                                                    
Morningside  with severe  cerebral palsy.  He stressed  that                                                                    
their physical disability inhibited  their ability to easily                                                                    
Mr. Jessee  looked at  slide 8,  "Mental Health  Budget Bill                                                                    
(FY16 Enacted)." He noted that  the largest component of the                                                                    
mental health budget  bill was for DHSS  (GF/MH) at $112.422                                                                    
million. He stressed that dissecting  an agency's budget was                                                                    
an  "art not  a  science."  He explained  that  there was  a                                                                    
determination  of  whether  all  of  the  drug  and  alcohol                                                                    
prevention programs should be  included in the mental health                                                                    
bill.  He stressed  that  there was  no  "magic formula"  in                                                                    
deciding what  should be included  within the  mental health                                                                    
Mr. Jessee addressed slide 9, "Capital Budget":                                                                                 
     •Separate MH appropriation bill includes portion of                                                                        
     the state's capital budget that funds mental health                                                                        
     •Includes funds for both operating and construction to                                                                     
     provide housing for Trust beneficiaries                                                                                    
9:33:19 AM                                                                                                                    
Co-Chair  MacKinnon wondered  if  AMHTA  worked with  Alaska                                                                    
Housing Finance  Corporation (AHFC).  Mr. Jessee  replied in                                                                    
the affirmative.  He furthered  that AHFC was  a significant                                                                    
portion of the mental health capital budget.                                                                                    
Mr.  Jessee  highlighted  slide  10,  "Mental  Health  Trust                                                                    
Authority Authorized Receipts -MHTAAR":                                                                                         
     •Trustees authorize state agencies to spend Trust                                                                          
     funds for specific operating and capital projects                                                                          
     •State  agencies  must  have  legislative  approval  to                                                                    
     receive and expend Trust funds                                                                                             
Mr. Jessee  stressed that  there was no  desire to  create a                                                                    
separate  system  for  mental  health.  Rather,  the  mental                                                                    
health budget  was an integrated  budget through  many state                                                                    
Mr.   Jessee   discussed   slide  11,   "Long-term   Funding                                                                    
     •Funds  projects and  activities that  make significant                                                                    
     and long-term  system improvements.  The Trust  can act                                                                    
     as  a   "venture  capitalist"  funding   innovation  to                                                                    
     increase  effectiveness/efficiency  of systems  serving                                                                    
     •Substantial   portion   of   Trust  funding   is   for                                                                    
     ongoing/long-term projects                                                                                                 
Mr. Jessee stated that the  slide showed the grants that had                                                                    
been funded for the most  recent ten years. He remarked that                                                                    
there was nearly $8 million  from MHTAAR. He stated that the                                                                    
authority grants was significantly  less than the $8 million                                                                    
for MHTAAR.                                                                                                                     
9:38:20 AM                                                                                                                    
Co-Chair  Kelly wondered  if long-term  was considered  four                                                                    
years.  Mr. Jessee  replied  that  long-term was  considered                                                                    
longer than four years.                                                                                                         
Mr. Jessee addressed slide 12, "Current Priorities":                                                                            
     1. Medicaid Redesign                                                                                                       
     2. Justice Reinvestment                                                                                                    
     Multi-prong   approach:   expanding   and   redesigning                                                                    
     Medicaid  and reforming  the  behavioral health  system                                                                    
     are  the  foundation  to  successful  criminal  justice                                                                    
Mr. Webb  displayed slide 13,  "Why is the Trust  so engaged                                                                    
with Medicaid Redesign?":                                                                                                       
     •For over 20 years Alaska has been pursuing a strategy                                                                     
     of "Medicaid refinancing" to take advantage of federal                                                                     
     matching dollars and reduce GF expenditures                                                                                
     •Systems serving Trust beneficiaries are now funded                                                                        
     primarily through Medicaid                                                                                                 
     •Sustainability of Medicaid is crucial to protecting                                                                       
     Trust beneficiaries                                                                                                        
     •Redesign must make Medicaid sustainable and improve                                                                       
9:44:23 AM                                                                                                                    
Co-Chair MacKinnon  wondered if there was  a comparison with                                                                    
other states  regarding Medicaid redesign. Mr.  Webb replied                                                                    
that  the Medicaid  redesign was  not unique  to Alaska.  He                                                                    
stated that it  was a major effort with other  states in the                                                                    
country.  He remarked  that there  were  various steps  that                                                                    
Alaska had  copied from  other states,  and some  steps that                                                                    
other states had taken but not Alaska.                                                                                          
Co-Chair  MacKinnon shared  that there  was a  suggestion by                                                                    
the  public for  eliminating  the  optional programs  within                                                                    
Medicaid. She  wondered if  Alaska had  become a  magnet for                                                                    
people with mental  health issues to come to  Alaska to take                                                                    
advantage of the  optional programs. Mr. Webb  felt that the                                                                    
current  system  did  not  attract   people  to  Alaska.  He                                                                    
stressed  that the  system of  care moved  to eliminate  the                                                                    
option for people to be housed in institutions.                                                                                 
Co-Chair  MacKinnon  noted  that  the  65  years  and  older                                                                    
population was growing at a  rapid rate. She noted that some                                                                    
individuals  were  taking  advantage   of  the  system.  She                                                                    
wondered if there were aspects  of the system that attracted                                                                    
people to  Alaska. Mr.  Jessee replied  that the  only other                                                                    
state that offered a "fee  for service" system. He explained                                                                    
that creating "holes"  in the continuum of  care by removing                                                                    
optional  services,  required  cognizance  of  understanding                                                                    
where  the  need  would  be  placed  in  other  systems.  He                                                                    
stressed that  it was more  important to manage a  system of                                                                    
care, rather than reducing the  number of eligible services.                                                                    
He  stressed  that there  must  be  the most  cost-effective                                                                    
constellation of  services to  meet the  basic needs  of the                                                                    
beneficiary,   rather  than   setting  arbitrary   silos  of                                                                    
Mr. Jessee looked at slide 14, "Medicaid Redesign":                                                                             
     •The  Trust has  invested  over $600,000  this year  on                                                                    
     various  contracts   to  provide   a  strong   base  of                                                                    
     information  and   options  to  help  the   state  make                                                                    
     strategic decisions regarding Medicaid redesign.                                                                           
Mr. Jessee  stressed that the  Medicaid redesign would  be a                                                                    
long-term process.                                                                                                              
9:51:03 AM                                                                                                                    
AT EASE                                                                                                                         
9:51:31 AM                                                                                                                    
Senator  Bishop wondered  if the  qualified individuals  who                                                                    
were  given GF  dollars were  still receiving  services. Mr.                                                                    
Webb replied that  some of those people were not  able to be                                                                    
served in a  Medicaid finance system. He  shared that adult,                                                                    
low income males, between the ages  of 18 and 65 who were at                                                                    
high risk  in the  prison population  were not  eligible for                                                                    
Medicaid  until expansion.  He stated  that  those men  with                                                                    
general substance  abuse problems or mental  health problems                                                                    
did not have access to care.                                                                                                    
Senator  Bishop wondered  if  those  individuals would  have                                                                    
access  after  reform.  He  noted   that  drug  and  alcohol                                                                    
problems  were  common  in the  prison  system.  Mr.  Jessee                                                                    
relayed that there was currently  a greater ability to serve                                                                    
those  individuals to  prevent and  treat their  problems in                                                                    
order to reduce the prison population.                                                                                          
Co-Chair MacKinnon discussed  her earlier question regarding                                                                    
seniors,  and whether  the system  was attracting  people to                                                                    
Alaska  for a  variety of  reasons. She  wondered if  it was                                                                    
accurate  to say  that  a  person 65  years  or older  would                                                                    
qualify 100  percent for Medicare rather  than Medicaid. Mr.                                                                    
Webb stated  that most individuals  65 years or  older would                                                                    
qualify for  Medicare. He furthered that  some would qualify                                                                    
for Medicare  and Medicaid, and  some would not  qualify for                                                                    
Mr. Jessee pointed  out that Medicare did not  pay for long-                                                                    
term care  services, so Medicaid  may pick up  the long-term                                                                    
care cost for some poor individuals.                                                                                            
Co-Chair  MacKinnon   felt  that  people  may   divert  from                                                                    
Medicaid  to  Medicare, and  found  it  intriguing that  one                                                                    
could  continue   with  Medicaid  benefits  while   also  on                                                                    
Co-Chair  Kelly surmised  that  Medicaid  was "need  driven"                                                                    
after age 65.                                                                                                                   
9:58:35 AM                                                                                                                    
Mr. Jessee  addressed slide 15,  "Funding Has Been  Used For                                                                    
Technical Assistance Contracts":                                                                                                
     •Reviewing Medicaid reform nationwide to identify what                                                                     
     has worked -best practices                                                                                                 
     •Developing a roadmap for Alaska to reduce costs and                                                                       
     improve outcomes                                                                                                           
     •Redesign  behavioral  health  system to  avoid  costly                                                                    
     crises and higher cost  care, maximize federal dollars,                                                                    
     improve results  to reduce costs affecting  other parts                                                                    
     of budget                                                                                                                  
Mr. Jessee  explained that AMHTA had  partnered with Charlie                                                                    
Curry  to examine  the  reforms made  by  other states  that                                                                    
would be applicable to Alaska  to build a sustainable mental                                                                    
health  program. He  felt that  Mr. Curry  was a  tremendous                                                                    
resource. He  stated that there  were many  opportunities to                                                                    
examine external aspects.                                                                                                       
Co-Chair  MacKinnon  wondered if  Mr.  Jessee  meant to  say                                                                    
"President Bush",  not "Governor  Bush." Mr.  Jessee replied                                                                    
in the affirmative.                                                                                                             
Co-Chair  MacKinnon  recalled  that Senators  Murkowski  and                                                                    
Begich brought the Charlie to Alaska. Mr. Jessee agreed.                                                                        
Mr. Jessee highlighted slide 16,  "Redesign … Now and in the                                                                    
    A number of reforms are already under consideration                                                                         
     •1915 (i)/(k) state plan options for Home-and                                                                              
     Community-Based services                                                                                                   
     •Primary Care Access Initiative                                                                                            
     •Behavioral Health Access Initiative                                                                                       
     •Data Analytics/IT infrastructure                                                                                          
10:03:48 AM                                                                                                                   
Vice-Chair  Micciche  wondered  where  "high  risk  physical                                                                    
management"  such  as  obesity  would  be  categorized.  Mr.                                                                    
Jessee  replied  that,  generally,   obesity  would  not  be                                                                    
considered  behavioral health.  He stated  that some  eating                                                                    
disorders   could   be   considered  a   behavioral   health                                                                    
Vice-Chair Micciche asked whether  high risk behavior was in                                                                    
trust's purview, or  in purview of DHSS.  Mr. Jessee replied                                                                    
that the high risk behavior would within DHSS work.                                                                             
Senator  Dunleavy wondered  if  those  with physical  issues                                                                    
that required pain killers, with  no manifestation of mental                                                                    
health  issues, and  become addicted  to  opiates, would  be                                                                    
under the  purview of the  trust. Mr. Jessee replied  in the                                                                    
Senator   Dunleavy   queried  the   addiction   preventative                                                                    
measures.  Mr.  Jessee  replied   that  there  should  be  a                                                                    
question   of   how    the   medical   industry   prescribed                                                                    
painkillers. He  stressed that there should  be training and                                                                    
best  practices to  ensure that  those  individuals did  not                                                                    
become  addicted.  The  focus   should  be  toward  how  the                                                                    
individuals would stop taking the painkillers.                                                                                  
10:09:23 AM                                                                                                                   
Senator   Dunleavy   remarked   that   the   Mat-Su   Health                                                                    
Organization  was looking  at  the  issue. Senator  Dunleavy                                                                    
remarked that there were many  drug commercials currently on                                                                    
television.  He  wondered  if  there was  an  issue  at  the                                                                    
federal level  to regulate  advertising. Mr.  Jessee replied                                                                    
that the  AMHTA did not do  much work on the  federal level.                                                                    
He   understood   the   problem  with   the   pharmaceutical                                                                    
advertising. He  furthered that the  alcohol industry  had a                                                                    
strong tie  to the  sports industries.  He remarked  that he                                                                    
understood that there should be a balance of free speech.                                                                       
Senator  Dunleavy wondered  if reform  included preventative                                                                    
care. Mr.  Webb replied  that AMHTA  was already  focused on                                                                    
prevention. He  stressed that the attempt  to affect policy,                                                                    
messages to children, and addicts.  He stated that there was                                                                    
a  constant prevention  effort. He  stated that  the tobacco                                                                    
national policy  change was a  result of the efforts  of the                                                                    
policy makers. He shared that  the trust would work with the                                                                    
state to continue prevention efforts.                                                                                           
Mr. Jessee continued to discuss slide 16:                                                                                       
     •Pilot Accountable Care Organizations                                                                                      
    •Alternative Benefit Plans for Expansion Population                                                                         
10:15:31 AM                                                                                                                   
Mr. Jessee looked at slide 17, "What's Next?":                                                                                  
          -SB 74/HB190                                                                                                          
          -SB 78                                                                                                                
          -HB 219                                                                                                               
          -HB 227                                                                                                               
          -DHSS: Medicaid Redesign and Expansion report                                                                         
          -LB&A: Medicaid Cost Containment and Reform                                                                           
          Initiatives report                                                                                                    
10:16:19 AM                                                                                                                   
Mr. Jessee displayed slide 18, "Justice Reinvestment."                                                                          
Co-Chair  Kelly wondered  when the  video  would occur.  Mr.                                                                    
Jessee  said  the video  would  be  presented later  in  the                                                                    
Mr. Webb highlighted slide 19,  "Why is the Trust so engaged                                                                    
with Justice Reinvestment?":                                                                                                    
     •Trust beneficiaries account for more than 40 percent                                                                      
     bookings and 40 percent of Department of Corrections                                                                       
     (DOC) population, each year                                                                                                
     •For felony offenses, Trust beneficiaries remain in                                                                        
     jail twice as long as non-beneficiaries                                                                                    
     •Recidivism rates are approximately twice as high for                                                                      
     Trust beneficiaries                                                                                                        
Mr. Jessee  addressed slide  20, "Justice  Reinvestment." He                                                                    
stressed  that there  were three  aspects that  would reduce                                                                    
recidivism   for    trust   beneficiaries    were   housing,                                                                    
employment, and  support for recovery. Removing  just one of                                                                    
those aspects caused a significant increase in recidivism.                                                                      
10:20:35 AM                                                                                                                   
AT EASE                                                                                                                         
10:24:59 AM                                                                                                                   
10:25:31 AM                                                                                                                   
Mr. Jessee presented a video.                                                                                                   
10:26:11 AM                                                                                                                   
AT EASE                                                                                                                         
10:26:36 AM                                                                                                                   
10:26:44 AM                                                                                                                   
Mr. Jessee presented a video.                                                                                                   
Mr. Jessee looked at slide 21, "Justice Reinvestment":                                                                          
     •There  is  a  critical intersection  between  criminal                                                                    
     justice reform and Medicaid  expansion and re-design in                                                                    
     re-establishing  access to  behavioral health  services                                                                    
     for  Trust  beneficiaries  at high  risk  of  and  with                                                                    
     involvement in the criminal justice system                                                                                 
10:32:36 AM                                                                                                                   
Mr. Jessee hoped that the video would help the public                                                                           
understand that incarceration of criminals with mental                                                                          
health issues, did not reduce recidivism.                                                                                       
Mr. Webb explained that there were 60 people in the                                                                             
correctional system with Alzheimer's disease and related                                                                        
Mr. Jessee highlighted slide 22, "What's Next?":                                                                                
     •Recidivism Reduction Plan                                                                                                 
     •DOC -Prisoner Reentry Initiative (AK-PRI)                                                                                 
     •Pew Public Safety Initiative, Justice Reinvestment                                                                        
     •Criminal Justice Commission                                                                                               
     •SB 91                                                                                                                     
     •Alaska Justice Information Center                                                                                         
Mr. Jessee addressed slide 23, "FY17 Budget." He understood                                                                     
that there was a major fiscal crisis, so all spending must                                                                      
be essential.                                                                                                                   
Mr. Jessee looked at slide 24, "FY17 Operating Increments":                                                                     
     IT Application/Telehealth Service System Improvements                                                                      
Mr. Jessee highlighted slide 25, "FY17 Capital." He stated                                                                      
that most of the funds were for ongoing operating costs.                                                                        
10:36:05 AM                                                                                                                   
Mr. Jessee discussed slide 26, "Cash Assets at End of FY15                                                                      
in millions":                                                                                                                   
     Inflation Proofing                                                                                                         
     TLO Contributions                                                                                                          
     TLO Real Estate Acquisitions                                                                                               
     Unrealized Appreciation                                                                                                    
     Budget Reserves                                                                                                            
Mr. Jessee looked at slide 27, "Utilize POMV strategy":                                                                         
     The Trust's base payout is 4.25 percent of the average                                                                     
     value of the fund's cash assets                                                                                            
          Funding approach ensures relatively stable cash                                                                       
          flow from year to year                                                                                                
Mr. Jessee  discussed slide  28, "FY17  Anticipated Income."                                                                    
He stated that there was  a payout, prior year's lapse, land                                                                    
office average  spendable income, and interest  average. The                                                                    
total distributed income was almost $29 million.                                                                                
Mr. Jessee  looked at slide  29, "Payout History."  He noted                                                                    
the  increase  in the  payout  over  time with  the  growing                                                                    
reserve. He  noted the increase  in the available  amount of                                                                    
money to support the state's mental health program.                                                                             
Mr. Webb highlighted slide 30, "Trust Land Office":                                                                             
     •GOAL: Match or exceed spendable income generated by                                                                       
     cash investments                                                                                                           
     •KEY STRATEGIES:                                                                                                           
         -Acquiring income-generating real estate                                                                               
          -Exploring and marketing mineral resources                                                                            
          -Land trade with Forest Service to increase                                                                           
          marketable timber                                                                                                     
Vice-Chair  Micciche wondered  if  the POMV  was created  in                                                                    
2008.  Mr. Jessee  replied  in the  negative.  The POMV  was                                                                    
initiated at inception.                                                                                                         
Co-Chair  MacKinnon  felt  that  the goal  was  obtuse.  She                                                                    
queried the goal  in dollars. Mr. Jessee  replied with slide                                                                    
28. He  noted that almost  $21 million was from  the payout;                                                                    
the Land  Office income  was currently  at $4.3  million. He                                                                    
stated that the Land Office  anticipated income was also $20                                                                    
Co-Chair  MacKinnon  surmised  that  there  was  an  exerted                                                                    
effort  to add  $16 million  to  equal the  payout from  the                                                                    
interest income. Mr. Jessee replied in the affirmative.                                                                         
Co-Chair MacKinnon wanted to see that plan.                                                                                     
Mr. Webb stated that Mr.  Morrison would provide some issues                                                                    
and direction of the Trust Land Office.                                                                                         
10:41:46 AM                                                                                                                   
JOHN  MORRISON,  EXECUTIVE   DIRECTOR,  TRUST  LAND  OFFICE,                                                                    
AMHTA,  highlighted slide  31,  "Trust  Land Office,  Annual                                                                    
Revenue -  FY 1995 to FY  2015." He stated that  there was a                                                                    
considerable amount  of information  on the  slide including                                                                    
real estate; timber; lands; coal,  oil and gas; and minerals                                                                    
and  materials.  He  noted  that  the  left  of  FY  10  was                                                                    
dominated by  timber and land.  Those revenues  were largely                                                                    
principle, and related to unrepeatable one-time events.                                                                         
Senator Bishop wondered what the  slide would look like with                                                                    
all of the land rights.  Mr. Morrison agreed to provide that                                                                    
Co-Chair  MacKinnon  wondered  the  Trust  Land  Office  was                                                                    
interested in an  ownership portion of a  pipeline. Mr. Webb                                                                    
responded that  the Trust Land  Office did not rule  out any                                                                    
options that would produce revenue.                                                                                             
Mr.  Morrison continued  to discuss  slide 31.  He announced                                                                    
that the Trust Land Office  mission was to maximize revenue.                                                                    
He  stated that  all  the decisions  regarding trust  assets                                                                    
were directly related to the  best interest of the Trust. He                                                                    
stated that the Trust Land  Office had adopted the mantra to                                                                    
"diversify, develop, and defend  trust assets." He looked at                                                                    
the 2010  and 2011 time  frame. He stated that,  until 2010,                                                                    
the Trust  Land Office was  dependent on two  income streams                                                                    
that  were not  repeatable  events. He  explained that  from                                                                    
2011  to current  day,  the  Trust Land  Office  had a  more                                                                    
dependable  and repeatable  income revenue  stream that  was                                                                    
continuing  to  expand.  He  also   stated  that  the  slide                                                                    
represented  a  directionally  incorrect  activity,  as  the                                                                    
Trust  Land Office  fully  transitioned  to a  sophisticated                                                                    
fixed  asset  management model  rather  than  a land  office                                                                    
10:45:32 AM                                                                                                                   
Mr.  Morrison  looked  at  slide   32,  "Trust  Land  Office                                                                    
Changing Timber  Revenue FY95 to  FY15." The  slide stressed                                                                    
the fallacy  of relying on  one source of revenue.  He noted                                                                    
the  significant timber  revenue, but  had recently  tapered                                                                    
off. There were  some lands that had not  been as marketable                                                                    
to  harvest timber.  He  shared that  there  was a  proposed                                                                    
forest service  land exchange to  trade roughly  20,000 with                                                                    
the forest  service. He stated  that there could be  as much                                                                    
as $60 million in trust  revenue. He shared that there would                                                                    
be legislation move that exchange forward.                                                                                      
Mr.  Morrison   addressed  slide  33,  "Trust   Land  Office                                                                    
Revenues vs. Expenditures FY 1995  - FY 2015." The blue line                                                                    
was the  one-time principle injections;  the green  line was                                                                    
the income revenue; and the purple  line was the cost of the                                                                    
Trust Land Office.                                                                                                              
10:48:43 AM                                                                                                                   
AT EASE                                                                                                                         
10:49:57 AM                                                                                                                   
Co-Chair Kelly discussed the schedule.                                                                                          
SB 140 was HEARD and HELD in committee for further                                                                              

Document Name Date/Time Subjects
012816 2016 Leg presentation Senate Finance FINAL.pdf SFIN 1/28/2016 9:00:00 AM
SB 140