ALC-JBC Special Language

Very. OK, members, I see it's 1:30, so it's uh time to begin. Give me comments, Mr. Co-chair? OK, um. Members, there's a couple of housekeeping items we need to take up first, so. Uh, we're gonna have some items that will be taken up in the committee, but they were not on the agenda, so I'll need a motion to suspend the rules so that we can take up those, uh, items so that they can be addressed, have a motion a second all in favor say aye. Any opposed like sign, that motion will carry. Uh, also, as we mentioned in the previous meeting, the items in section C of the agenda will be batched. But members can, uh, request that some of those items be pulled. I have one member that got hung up just a little bit and it's on the interstate, so we're gonna take another item ahead of the batch. So if you all can be looking through those, so if anybody else has any items out of the batch, which will be everything up above D. And then there'll be a few handouts that uh are gonna be given during the meeting, uh, so please allow staff to, uh, give you those so that everybody on the same page as we have that discussion. And at that, and at that time, the appropriate uh agencies will come to the table. So at this time again, instead of taking up the batch and we allow everybody to look through it, but I would ask that, uh, uh, Mr. Hugh McDonald and the staff, if y'all would come to the table. For the Department of Commerce. So what we're gonna be doing members is the. 3/43. That's on page 4. No, page 4 of the agenda, yes. So if you don't mind, you can recognize yourself and then you can begin. Good afternoon, Hugh McDonald, Secretary of Commerce. Good afternoon, Clint O'Neill, executive director, AEDC. All right. And I think you're gonna give some discussion on an item that came up previously. Is that what you're gonna do, if, if it's OK, I can kind of give a little history, um, on the Arkansasconomic Development Foundation. Um, you know, the, the forerunner of AEDC was the Arkansas Industrial Development, Commission, and it was created by the General Assembly in 1955 via Act 404. Governor Winthrop Rockefeller was its first chairman, and, uh, he was charged with bringing new industry to the state. And expanding existing industries during, um, he was the first chairman of AIDC and, and during that chairmanship, he created a what was called committee of 100 at the time to raise additional private sector money, uh, to support the AIDC operating budget and uh actually found it interesting. He asked business leaders from every county across the state to give at least $100 back in, in the, uh, mid-50s. The funds that were collected, um, you, uh, from, uh, created, you were used to create the nonprofit Arkansas Industrial Development Commission Foundation. Which is the forerunner to the Arkansas Economic Development Foundation today. So since it's exception for almost 70 years, the foundations function to supplement the state's economic development agencies operating the budget at no cost to the state through private contributions, uh, expenses that are essential to conduct competitive economic development activity, domestically as, as well as internationally. So simply put the foundation is and always has been. Uh, there to support Arkansas, not only to help fund critical expenses to, but to be its cheerleader, transcend administrations and always be there to support, uh, the home team, Arkansas and AEDC. So, um, One of those expenses is to provide a market-based compensation to ensure Arkansas can recruit. And retained competitive leadership talent at AEDC. Under Governor Hutchison's administration, uh, A nationally recognized development recruiter, economic development recruiter, pace, the PACE group, uh, out of Mississippi was hired. In 2015 to hire, uh, the executive director. Uh, and the foundation has supplemented the compensation package for the executive director since that time. Um You know, I, I can't tell you the process that was used to measure the performance, uh, previous to my tenure, uh, but as I understand it was based on an annual review process at the governor's discretion, um, I, I can describe to you, um, the process that we use today, uh, the performance-based bonus process that currently exists. Um, and I, and I'd start first by saying, Economic development, while its competitive, it, it's a, it's a team sport, um, uh, state and individual communities have got to work together and having a trusting and collaborative, uh, relationship to achieve economic development success, no matter where you are in the state or really no matter where you are in the country. In my previous role at Entergy, I was involved in and have been keenly aware of economic development activity and saw, um, and experienced what can happen. Uh, or not happen when those relationships don't work. And, uh, when those relationships are not positive, um, uh, it's, it's a problem. So the governor assigned me, uh, when I got this job with the responsibility of filling the position of, um, AEDC executive director. And, uh, recommending the candidate uh to her for her final sign-off. Um Because it's, as you know, this, this position is critical. The governor, um, economic development is, is a critical, um, Uh, position, uh, critical function of state government and it's important that she was able to, uh, meet the candidate, uh, Mr. O'Neill, and uh make sure that she could work with. Um, in my evaluation of recruiting other candidates, both inside the state. And outside of the state, It was clear to me that Mister O'Neill, um, Fit the bill. Um, he was the most senior leader at AEDC at the time, worked there over a number of years, had the experience outside of Arkansas as well as inside. Uh, from Arkansas, family in Arkansas. And uh, and, and back to the, back to the team relationship. Um, I also personally contacted. Um, regional economic developers across the state, um, people that I, I knew, uh, historically and have met. And all of them were extremely positive of, uh, had the, had the credibility that Mr. Olino have the credibility and relationship. for economic development success. So, um, in that process, um, Required the recruitment hiring process required providing competitive compensation supplemental to the foundation supplement supplemented by the foundation. That was really no different than his, his predecessor going outside would have, uh, actually caused us to spend more money. Um, uh, not that we got Mr. O'Neill cheap, but, uh, um, it would certainly would have required a uh a uh relocation package. Uh, Mr. O'Neill is accountable to me. And his uh supplemental bonus compensation is based on specific performance metrics. In consultation with the governor. And uh those specific performance metrics are established, each calendar year, and they're weighted 60% of them are weighted objectively on one as one goal is the number of jobs created in the previous year. Uh, the second goal is the dollars of capital investment and the 3rd goal average wages, and those are on signed incentive contracts of the previous year. There's additional metrics that are subjective, but they're based on Uh, specific initiatives and objectives that we have going that particular year. So Example of 2023's, uh, quantitative results, 40% of weight of the performance bonus is based on the direct job created direct number of jobs created that, and it, the results were it exceeded. Um, 20% of the 8 8-year average, um, So there was a, there was a target set, 100% of the 40% target was set, uh, which was 20% higher than the Previous years and we he we exceeded that target by 20%. Um, capital investment was 10%, uh, met the maximum target 99% of the maximum target on that and 15% was, uh, based on hourly wages and met exceeded that goal as well. So, Um, that's how we got to this point in terms of that's how it's measured, uh, objectively, and, uh, um, Be happy to answer any questions. OK, members, uh, we're taking this back up from last week because there are some questions, so it's in volume 3 and it's page 43. So here in a minute, we're gonna possibly taking a vote on this. Right now we're going to uh go to questions, uh, Representative Kavanaugh. Mr. Chair, thank you all for being here. Um, I just wanna say my problem with this language is no reflection upon your job and your ability to do your job. For me, it's a philosophical problem. And If it were up to me, I'd raise your salary to what you're worth, and we pay it through the state because I think you're worth it, worth every dollar you're getting paid. What I think though, is a problem for me. It's like I said, it's a philosophical problem about we're getting paid outside your state employee, but yet you're getting paid. I will say this, you're not the only one I've had this philosophical problem with. I had it with Game and Fish Laser and physical session. We have specific special language that prohibits the Uh, Secretary of Education from being able to do this. So we've got, we're bipolar in the state. We're split. And it, it, it's a philosophical. I just want to be on the record to say this is no reflection upon you. I do think that you do a good job, and it is important and I appreciate the work you do. I think we just need to pay you the money, not a foundation. The foundation can assist you that would give the foundation more money to be able to assist in other ways. I just want to be on the record to say that. That is not what my problem is. My problem is a philosophical. problem about serving two masters. Thank you, Representative Kavanaugh. Is there anyone else has any questions in regard to this? OK that Senator Rice? OK You reckon that came in a little bit late. I would welcome, uh, your response from. The concerns that. Represent Kavanaugh has made if I missed uh opening um. You don't need to restate. Yeah, um, and I, I appreciate, I appreciate the philosophical issue, Representative Kavanaugh, um, I, I do not see the issue of, uh, two masters here, um, uh, Mr. O'Neill is, is accountable to me, um, we review the performance, uh, evaluation, not the, the, I mean, we provide the results of the performance evaluation. Uh, to the foundation. But, uh, we established the goals together. Uh, we make sure that there is, uh, what we call smart goals. They're specific, they're measurable, they're achievable, um, and they're time-based and they're, we try to, try to be as a bit objective as possible. Um, so we have some stretch in those goals, um, before we sign off, I consult with the governor to make sure the governor is supportive of it as well. And, uh, and, and, and that's, that's the process and uh the the foundation has been And always has been nothing but very supportive and, uh, I, I, I've never, I, I know many of them. Um, and, uh, never viewed them as, um, Clint being accountable to them. They know Clint is accountable too. The state and doing his job and the governor and, uh, they've, they've always been nothing but um, wanting, wanting to find ways to support the state because their mission is growing the state from an economic development perspective and, you know, I have great, uh. Confidence in you and, and respect for you and the gentleman, I, I don't know well, uh, and have absolutely nothing against that and, and I know the foundation does great work. I've stayed again and it'll always stay with me because it really did burn me and I stayed it last week. The last administration. Had a had a director in the same position that this gentleman's in. And stood in the governor's conference room. And said in public with everybody that was in there. And he called the legislators by name first. And he had Chairman of Chinese company who are only can be chairman with the communist Chinese approval, and he said, Mr. Chairman or something to this effect, these are your legislators. That's where the two masters deal hits me, and I don't want that mindset to happen again. Because people of Arkansas elect us. And and that was, that was just. It just struck me. Bad raw And it, it was never apologized for it. The governor never asked him to apologize for it. But that's the kind of mindset that can happen and that's what I'm cautious on this. So just to make you aware and make everybody aware, uh, who we work for and, and, you know, the outside help is fine as long as it's just considered as help for the state of Arkansas. Thank you. Thank you, Senator. I was not aware of the, the history, but I appreciate, appreciate sharing. Clarification that was the previous executive administration, correct, Senator Russ? OK. Any other, any other questions in regard to this? OK. Uh, I'll have to have a motion again. It is, uh, Volume 3, page 43. So do we have a motion? For the special language. Doing what? Senator, I mean, Representative Eubanks, motion do pass, is that correct? And we have a motion to pass in a second. All in favor say aye. Any oppose Let's do that one more time. All right, all in favor say aye. Any oppose? I'm gonna consider that past. Thank you. Yeah, appreciate you all being here and explaining that. Appreciate it. OK, members, as I said, we took that out just a little bit out of an out of order. So what we're gonna do now is we're gonna go back. To page one on your agenda. And the batched items or anything on page one. 2 3 And part of 4 just down to D. So if you, if anybody here wants to pull out any of those items, just tell me now and what we'll do is we'll pull those out and then we're gonna vote the vote the batched items that are left. OK, Senator Irvin. Hold on a second. I'm OK, your own. Thank you. There's one that I'd like to pull out for further discussion, and it's division of Medical Services, DHS 0710, um, Act number 161. And I'm trying to find it in the manual. You see it on the agenda. Let's see here, it would be on page. Probably page 3. DHS, do you, do you all know the particular number that she might be in reference to? it's the Arkansas Children's Hospital, the um Um, grant fund for Medicaid payments to Arkansas Children's Hospital. OK, if you could just, only thing we're gonna do now, if you can just help with the, help with the particular number that Sure. Um, so that is not 161, right? Give me one second because I was looking at one the other page. It has to deal with the Medicaid. funding and match funding and I'm sorry, I cannot find it in the menu. I have it. Page 110. OK, 5-110. Thank you. OK, we got 5-110. Senator Irvin, do you think that's the particular one. I believe. That is correct. OK. Is there another one or is that the only one? I think that's it. OK. There's no, no problem. Representative Kavanaugh. Do you have one that you want to pull out? Well, I just have one I want to make a clarification question on it's gonna be on, uh, 5:32. On enhanced student achievement funding name change? Is this gonna be one that we're gonna ask, is this one that we're asking them to give us the justification of why it needs to be special language. Hold on just a moment. Let me That I'm just curious why this can't be codified, I guess is what I'm asking. Yeah, that's, that I should, I should have reminded everybody this. You, you remember the motion we made in the first meeting so that, uh, uh, the justification will, will come back to us. That will be included in that particular report. Now, if you want to pull, if you were to want to pull this one out and just have some discussion, I'm happy to do that too. Well, I mean, if they're gonna do that, then when that report comes, then we can have those discussions when we got there justification, correct? Yes, ma'am. OK, I think that's a better time to do it. Thank you. Sounds good. Anyone else Senator Irvin, are you back on or did we just leave you on? No, if I could just ask Ms. Pittman, I think that's the only one of your special language that that deals with our Medicaid match because I just have some questions about the, um, Medicaid and those transfers of funds. Yes, I believe it is the other ones deal with the research through UAMS. Is that correct? Yes, yeah, that's, that's what I understood. OK, so yeah, that's, that's the only, the only one. I, I have questions on the others, but I can get with you IMS offline. So you don't want those pulled out? No. OK. And, and y'all all are, are all in agreement that that's the only ones that deal with the Medicaid match that's within the special language today. We will verify that. Yes, sir. Let me verify um there was, there was another section that we were looking at. Um, on special language of transfers. From children, that's. There are, there are 2. OK. Is it, is it on 109 or 108. Uh, it's 104 is the transfer of appropriations. OK, um, 108 is about rate setting. OK. OK, so pull out 104 and 110. One I don't have them numbered the same way you do. I apologize, so. We're, we're gonna take the time to get it right. There's no, we're in no hurry here. is it I don't think 104 will be one of them. And Then it's the, it's the funds usage authorized. fund's usage off there I just OK, so 110 and then 7B 407, the research transfer. That's through UIMS. At the very bottom of the transfer funds shall be used to match retal funds used for supplemental Medicaid payments to children's hospitals. That's how, that's why I associate it with children's. OK. So that one would also need to be pulled out. What number is that? Is that 7B407? Yes, ma'am. OK. That's UAMS and then Uh, 7418. There are, uh, transfer and authorized. OK, so I would pull out those 3, please. That's the last one. 7B 407 and 7B. Um For 18. OK. Right? So you're finished with those. Yes, those are the three I requests to be pulled out. Thank you, Senator Ervin. We appreciate you all helping with that. Representing Kavanaugh, do you have, do you have another one? OK, which one, ma'am? question Sure, go ahead. Oh yeah. Thank you. So the language, the language that we passed in joint budget this morning dealing with the vehicle purchases. Does this apply to this also? Cuz this is not where they're actually purchasing it. It's just where they're transferring funds. Which one is this again? It is 582. Oh, I'd already looked at this and the staff may can help, but I can, it can also. They work together. OK, just wanna make sure. OK, thank you. Yes. Anyone else OK, members, what we're gonna do then is we're gonna batch everything, but we're not going to do 5-110. SB 407. And SB 418. Those 3 will be pulled out and we'll discuss those uh separately. So do I have a motion to batch all those except for those 3 albums. I have a motion a second all in favor say aye. Any oppose? OK, seeing that motion to, to batch those we'll, we'll carry. And we will begin with Yes, thank you for that. Well, Agency OK. Motion to approve the batched items, other, other than those three, of course. We have a motion, we have a 2nd. All in favor say aye. pose OK, that motion carries. OK. We got it double. So anyway, let's, uh, let's go on the first, we're gonna go to 5-110. This is the first item that was pulled out. So if you don't mind if DHS, if you'll come down to the table. And whenever they get here, if Janet May and DHS. Jason Callen DHS. OK, Senator Irvin, you're recognized. Thank you, Mr. Chair. Thank y'all for being here. I have questions about This. Um, process. The history behind where we are and why we're doing what we're doing. Um, one of the things that concerns me is the magnitude of the growth. That has occurred in the state general revenue obligation to provide for this, um, outpatient cost settlement, and they, the Arkansas Children's Hospital is the only hospital that receives this, um, I, I believe the other hospitals and, uh, correct me, um, but I believe the other hospitals, according to some of the reports that we received on Medicaid sustainability. Um, do you receive an, an upper payment limit, which is a cost settlement, but they provide their own share of that. And we have a process in place where those hospitals contribute their share. We don't have that in place for Arkansas Children's Hospital. And so I'm trying to understand because our estimated state general fund obligation in 2018 was 21 million, 21.7. Almost 21.8 million, and that has increased dramatically to 2023 was 35.1 million. And so, they're the only hospital that receives this outpatient cost settlement and they my understanding from the report and the third party actuarials is that they do not provide their own funding for that. That, that is also state general revenue. And so I'm really questioning at a time where, you know, things are tight. We have a pay plan that we're trying to consider. We have an obligation of building a new prison. We have education funding. We have all these on Going needs and everywhere we turn, there's not going to be funds available to meet the needs in a lot of different areas. And so I just need to know the history behind this. I need to know why this continues, um. And so I just, if you'll give me the history behind this and exactly what that process is on, uh, these transfers of, of state general revenue. Certainly, um, I will, I need to clarify a few things on inpatient and outpatient on the hospitals and then I will give you as much history as as I'm aware, the process was in place prior to any of us taking, um, these positions, so some of the history I may not know, so. Yes, we do an inpatient and an outpatient upper payment limit payment for the private hospitals in the state of Arkansas. It's called the Access payment. The hospitals do put up their state share for that, um, children's uses some of these funds to be matched for their inpatient UPL payment. So that, that is accurate, that money flows, and I, I don't know the history of how it started or or why, but they're various sources of that funding is y'all have seen. For the out patient cost settlement that is outside of the UPL payment. Children's does not participate in the outpatient upper payment limit. They only participate in the cost settlement process. We do pay a few other hospitals on cost settlement for outpatient, um, but the one at Children's has grown and has grown over the years, and we do pay for that with state share out of our Medicaid budget. And so why has it grown so much over these years. Is there any, do we, can we point Any data here and I think, um, I will attempt to answer from our interpretation. I, I, I do think children's, um, hospital could also answer that a lot better having, having those operations under, um, their, um, umbrella. So we have seen there was a new hospital opened in Northwest Arkansas. They do have a separate provider number, but they, they do have a, a part of the cost settlement process. So we've seen that grow and then in speaking with them, they They, they indicate an increase in utilization. They do submit a cost report that is reviewed by third party before it is paid. So there is some checks and balances, but it is, it has grown. So, you know, one of my concerns is the, I, I think the structure of this, because we're utilizing 100% state general revenue, when we should be figuring out a way to transition this. Either to a different process where we can take advantage of our FMAP and our 70/30 match. And that would be through rates or through general reimbursement. I, they receive reimbursement, correct? through Medicaid, we pay them for the services that they render already. We, we pay them just like every week when everyone else files a claim, we do pay them, we pay them a per diem for their inpatient claims, and we pay the outpatient charge of ratio for the outpatient services every week when they submit claims. That is accurate. Now do they receive an enhanced rate, they do have, um, a I don't call it enhanced, but they do have a larger per diem than some of the other hospitals in the state. Is that because they're a teaching hospital, or why? Just because historically I believe it's because it's children's. I, I, I would have to go back to the history of why. I don't know that I can answer that. OK, so, you know, we have, we now are down to 30 hospitals, I believe across the state of Arkansas that can deliver babies. That have a labor and delivery unit now. I think we're only at 30. I thought it was 33, but it could, it could be changing. Yes, that's true. And, you know, I know Newport was a big, um, area that no longer now is able to deliver babies and, you know, my concern is at one point, I think, you know, it's probably very appropriate and good that the state put in general revenue to support the growth of this children's hospital and I think it's wonderful and they did great work. But at a time where we really have made these commitments to the taxpayers of the state of Arkansas. I'm just not sure that this is continuing to work. Because it is 100% State Journal revenue and is growing exponentially, and it is sucking down the entire Medicaid budget, and at the cost of all these other rural hospitals that are trying to keep their labor and delivery units open that are trying to keep their doors open to provide services and healthcare for the citizens of the state of Arkansas all across the state of Arkansas, and of all ages. And when I look at the audit of Arkansas Children's Hospital, they have over $1.6 billion. In an endowment fund. And at a time where we can't find money to pick up the used tires. I'm not sure why the state of Arkansas continues. To provide state general revenue in this manner, where we're not maximizing the 70/30 match, number one, where we're not treating them same across the board as other hospitals, #2 and 3, when we have committed to a pay plan that this entire legislature has, uh, committed to. We are building a new prison. We have committed to teacher salaries of 50,000 annually across the board and everything else in Arkansas learns. And we have made a commitment to reduce the state income tax down to 0. Why are we giving state general revenue in the form of earmarks and a process that's not maximizing our state general revenue to an entity that has over a billion, $1.64 billion in net assets. I don't know that I have a clear answer. I would refer you back to the MSRP report, where in the outpatient cost settlement, um, options for consideration for for this body and others to consider. We did look at options of eliminating it. We did look at options of eliminating all cost settlements, and we did look at options of paying with different, um, payment methodologies of DRGs for inpatient and APCs for outpatient. We, um, we, we commissioned that study to look at all parts of Medicaid for sustainability. That was a large section. It was a large section that we, we did get a great deal amount of public comments, pro and con about and. Um, some of those very issues were raised in the, in, in those public comments. Well, I, I don't like doing business as usual just because we've done it for the past 20 years. Those were yesterday's problems. We have real problems today. And it's women who need to be able to deliver their babies safely in a hospital near them. At 100%. That is the emergency that we're dealing with in the state of Arkansas. And so I would just, I would ask that these special languages be held so that we can just get more information, Mr. Chair. I'm not willing to, to pass these today, because I feel like this is an area that we've got to be serious about, and we have to understand where we are in the state budget. We have to understand our Outstanding obligations and commitments that we've made, and we need to solve today's problems with state general revenue, not yesterday's. And so with that, I would just ask for us to hold these till the next meeting. OK, well, that's, that's gonna be just a little issue there because we're not planning on having another meeting, uh, special language. Correct? So. Um, is there any other questions that For DHS on this. You know, and I tend to, you know, of course, everybody's, uh, Appreciates, uh, children's, of course, but I, I tend to agree, and of course, uh, I know that a lot of this is just coming to light in these budget hearings, and I asked that, you know, or it looks like to me that, you know, when we get in session, there's gonna have to be some harder questions. Do we have money sitting around the state? We do. We have money sitting everywhere. Everybody knows that we have savings accounts and all that, but I think what you're in referring to is our cash. Our cash flow. And I think, uh, here a week or so ago, you all are a large part of what we have just now. Come to understand. Because we understand that we were taking an excess out of, uh, uh, the Medicaid Trust Fund, you know, I understand that, you know, we passed a special language that requires y'all to report to us and then we also understand that the FMAP has now changed, and I think you all had said that you actually expected, uh, if I remember, sir, I believe you said that you thought, and again, we're estimating, but that that was going to be, that we were going to take 225 million more out than we put in. And if I remember right, I'm just operating off my head with this. We had about $540 million in the trust fund. I don't know what this body wants to keep in there as far as a, uh, a reserve, but, you know, from my standpoint, you know, basically, I would think we may have a year and a half left. Before we would exhaust that. You know, personally, I don't like it because it's not, uh, uh, it's not included in RSA. And I don't know that whenever we get into session that I'm going to be willing to do that, uh. I'm not, I'm not, you know, this, this state has a balanced budget amendment, and I don't know that, uh, if we're allowing funds to be taken out of large accounts and it's not in RSA if that's what we need to be doing. Uh. So I tend to agree, again, we have money everywhere, but as far as uh ongoing expense, which is, this is, I just don't, I struggle with it also. Representative, uh, Gene. You reckon no, sir. Thank you, Chairman. I'd like to put a flag on this. Go ahead and let staff draft this, and then we can bring children up. During the session and, and get some answers and determine what we're gonna do with it. OK. So do, do you want to make the, one of you want to make the motion, the other one's 2, or how, is that OK with you, Senator Ervin? How do you want to handle this? Yeah, I'd also like to ask DHS on just a second. Are you finished, uh, OK. Thank you, sir. And I, and I, and I hear what you're saying. I'm holding, holding for a minute. You're recognized. Thank you, Mr. Chair. I appreciate that, Representative Jean, and I agree with you and, um, I, I think I would just, I know this is permission to draft the language and, and let our staff continue to work. I, I do want this flagged, but I also want to ask DHS if you will really seriously consider all three of these pieces of language in conjunction also with UAMS because it's under their appropriation as well, but I wanna look at all the areas where there is funding that is going to Arkansas Children's Hospital in the, in the way of these processes of cost settlements, but also any earmarks. That they receive, um, again, we've got to just make sure everybody's on a level playing field and that all of our hospitals are treated the same. And so I'll, I will, I'll defer to representative Jean's motion to pass these, but flag these with the With the, uh, direction that y'all look at this and, and let's really work to see if this language is necessary or how it can be constructed to bring this back in line and with our needs. And I hear what you're saying, Senator Irving. I think that I was taking them one at a time. So if, if, let's just do them one at a time. So the first one, of course, is 5-110. Wrapped in gene, uh, you made a motion that we Flag these and and hold them till the session, we'll go ahead and draft the legislation, but of course, we're not, we're not passing the special language. So I have a motion. Representing Wardlaw, did you have a question? I'm sorry, I didn't see you. I got a question for the department. If you let, but I know we got a motion on the floor uh, are you OK, Representative Genan? Yeah, go ahead. So Going back to all the discussions last spring and, and I'm slow and don't remember half the stuff that I try to, but. There was a big discussion about children's and how they're reimbursed and then moving forward with the, I believe it's called DRGs or something like that with the hospitals. How does this fit into it or does it fit into it, or is this in excess of or what kind of explain to me, Janet, how this works, if you don't mind or mismann. I'm sorry. um, so DRGs is diagnostic related grouper, and it is a payment methodology for inpatient hospital services, and we currently pay under a per diem, which is just a flat fee. It's not tied to the service being delivered. So moving from a per diem to a DRG can impact any hospital, depending on the services being delivered, because now instead of getting a flat daily fee, you're getting a fee for the service being delivered. So outpatient is a little bit different. It um, it's an APC or an ambulatory payment, um, classification, and it has its separate methodology, but the biggest struggle in seeing this, um, in several, um, other places I have worked is the transition from going from a per diem to a DRG takes time and that's very, it can be very difficult for hospitals to budget for because some hospitals will be winners in the DRG because they will do very complex procedure. open heart procedures, or, um, other options as opposed to an appendectomy or, or something else that will not pay as much unless there's, um, an acuity of something going wrong. So that balance of, of transitioning from a per diem to a DRG can set back some hospitals. And can be very difficult to transition. So when you look at that modeling, that is for the everyday, every week claim payments that we have that we've not, um, made that change or made that recommendation, we have been looking at it. We, um, in some of the modeling, we've just not been able to find a way to have as few losers as possible and to be budget neutral, designing it with the amount of money that we are currently spending. So that will play into some of the upper payment limits and some of the outpatient cost settlement that occur for every hospital, because usually you, you, you use what you've been paid and then you compare it to Medicare or to another, um, group to determine the delta for those payments for, um, upper payment limit for cost settlement, we're paying up to cost. And so they are related, they just. It's not a one for one, and hopefully I have answered your question, I think the point in bringing it up, Mr. Chair, if you'll allow me, was that as we get to the session and we start discussing this, and I do appreciate the motion with the flag. I think it has to be a holistic policy decision on how we move forward with this and not just the decision based on a particular piece of special language. So, I think that was the point I was trying to make is we've had some of these discussions. I think this kind of leads into the final discussion, hopefully, uh, but I, I, I support Representative Lane Jean's motion and statement fullheartedly. OK, we have a, we have a motion in seconds. Are there any more discussions on the motion? Senator Irving, do you? Yeah, I agree 100% with Representative Wardlaw. I mean this, the reason why I wanted to discuss it today is because it's the budget. And our budget is being impacted greatly by this. And so, um, time to look at all aspects for a holistic approach on solving this problem that we have a lot of needs in the state government with revenue. And so we've, we've really got to tackle this. Thank you. OK, now members the motion, the motion is for 5-110 by itself will hold it and flag it for the session. Well, all in favor, say ah. Any oppose? OK, that motion will carry. Now, the next one, Senator Irvin, I don't know if you want to discuss it, or do you just want to try to flag and hold this one is gonna be 7B 407. And if you wanted to group it, it'd be 7B 418 also. So how do you want to do it? You're recognized. Thank you. We can, we can group them. I think this is a UAMS and DHS issue, but I think it's along the same lines of just making sure that the transfer language that we are You know, it's important that me, to me, UIMS is the primary teaching hospital. And so, I really think that we need to focus and concentrate there. I realized that children's is part of that, but in a way, some of that language is crafted, um, Some of its permissive, some of it's mandatory, but again, flagging those to make sure we're doing what is appropriate with the both teaching hospitals that we have, but UAS being the primary one. So I would just Our flag flag those for for the discussion. All right, motion to just as the other one and that's a 7B 407 7B 418. We're gonna flag it, hold it, go ahead and draft the, uh, language, but we'll have to take it up into session to see if it's going to pass or not. So I have a motion to have a second, have a second, all in favor say aye. Any oppose? OK, that motion will also carry. Thank you all for coming down and also helping us, uh, find those. Thank you. OK, members, that was the, the, all the batched items and what was pulled out of the batched items. So now if you'll go to 4, we've already, we've already did, uh. D 343. So now what we're gonna do is we're gonna go to D under public employee retirement, 159. Members were moving to volume one. And we're gonna be discussing two pieces of language, the agency is coming to the table on page 59 it's a special state police retirement fund transfer language and on page 60 it's a special judicial retirement fund transfer language. Hey, give us just a second until staff gets you, that's your OK members just as a reminder, we had held this in the last meeting and you requested some information and possibly a, a way to get it out of special language. So, if you don't mind, just recognize yourself, Miss Fetcher, and Whoever's with you. Amy Fletcher, Apers. Jason Willett Apers. You recognize if you want to. So after our last um Meeting, we went back to the table and tried to come up with a formula Senator Irvin had suggested, um, to make sure that we were cost sharing correctly between the public employment retirement system, judicial retirement and our state police retirement system. So we looked at it two different ways. We looked at it as the number of assets that we manage for each system and then we also looked at the number of members that we manage for each system. And what we came up with was um doing a fifty-fifty waiting on those to get the total percentage of our system. And as you can see from the handout, um, we, we've been pretty close on the numbers that have been, um, Expended in the past few years, but they will increase, um, on both systems, the state police and judicial. So our proposal um would be that we leave special language as it is for this biennium, uh, but then I had talked about with Senator Hickey about proposing legislation as part of our packet for this upcoming session that could take it out. The main reason to hold off until July 1 of 27. is for the state police to be able to get that increased amount in their budget. I spoke with Secretary Hagar and he said he felt much more comfortable doing it that way. I'll take any questions. Send her Irving, you're up. I just thank you. I think this is good work and I would, you know, absolutely confer with you as far as just leaving it as is taking our time to adjust it, putting it in legislation. I think that's great. So, I, I just think that this is a, a nice process and something that everybody. It is clear and, uh, transparent. So I just want to thank you for doing the work. Thank you. So just to be clear, what, what you all are are asking for is to go ahead and pass a special language as the executive rec with your guarantee that you're gonna get the legislation. To come forward in this session. However, you're gonna put a beginning date in of, of what? July 127. Do all the members understand that, although We're gonna go ahead and pass this, but this is gonna be in the, in play. And then if you all choose to pass whatever they come up with in session, then of course, we'll move to that. OK. Do I have a motion. OK, and on this one, we're gonna do both, right? Just 11-59 and 1, 160 together. So we'll be, it's a motion for both. Have a motion in 2. All in favor say aye. And he oppose The motion of Carrie. Thank you all for, uh, working on that. OK, with that members will go to, uh, Department of Agriculture, 4-10. And I believe Do we have a handout on that also. Yes, sir. Members, we've got 3 handouts for Department of Agriculture, so staff will be bringing them around. The first handout is going to be on page 10 in volume 4. And it's carry forward language. The second is going to be on page 12 still in volume 4, it's fund transfer language and the last piece of language that you will get is new. That the department is requesting its reallocation of resource language. The department is at the table to answer questions. Give us, give us just a minute. I want to make sure all the members have all the handouts. OK, let's just, let's take them one at a time. So I guess the first one is gonna be. The ones labeled page 10 at the bottom. Members To carry forward language. And if you'd recognize yourself and you can begin. Yes, sir. West Ward from the Department of Agriculture. So this if you all would just all recognize yourself so we can go ahead and get that on record. I knew Suzaki Department of a Kyle Cunningham Department of Agriculture. Thank you all. All right, Mr. Ward. Yes, sir. So this is, uh, a continuation from the uh special language meeting last week and so we, uh, we took that carry forward language and I made adjustments there that I that we think have answered the. Uh, some of the questions there in, in particular, uh, it, it limits that carry forward, uh. Up to $500,000 so it does put a cap on what's eligible to be carried forward. Uh, and then, uh, in that first paragraph that, that you see on that language made it more specific. For what that carry forward could be used for and and very specifically for maintenance and operating costs associated with wildfire suppression, uh, as well as the purchase of fire suppression equipment for the forestry division, so that was part of, part of the conversation last week and we've made the adjustments to that language. Great members we had requested that they look at this, uh, is there ever anybody have any questions of the agency? OK, do I have a motion? I have a motion. Do we have a second? Have a motion 2, any discussion on that. All in favor say aye. And oppose that motion will carry. So next we'll go to, I guess, page 12, that's gonna be the fund transfer language. And you're recognized. Yes, sir. So, uh, similar with the K4 language uh on the fund transfer continuation from the discussion last week in special language, uh, for that 1.1. A million dollars there to tighten that special language up in particular in that first paragraph, I'll just read it, purchase the firefighting equipment and force fire suppression activities to include maintenance and operation costs associated with viru suppression, so we're just makes it very much more specific on, on what that uh funding can be used for, but, uh, we think that that answers the questions from, from last week, but happy to take additional questions if there are any. OK. Members, we'd ask that they get more specific as you probably remember, any questions of the agency on this particular one? OK, do we have a motion? I have a motion. I have a second. All in favor say aye. Any oppose That also carries and we appreciate you working on that. And the last piece is a, this is a new piece of special language, is that correct? OK, so you're recognized sir, yes sir. So, uh, so we had submitted a letter uh for a budget hearing that was held this morning for the consolidation of of an appropriation bill for the department so it consolidates really all the operating divisions within, within the ag department to include natural resources as, as part of one appropriation bill, uh, so we had some language there and and worked, uh, with, with the staff to make sure that that language is is appropriate, uh, for the reallocation of resources should they. positions need to need to be adjusted and the primary point that I would point out there is that uh it does include. Uh, approval through legislative council or joint budget committee and there's, there's this paragraph on the second page there, uh, that Kind of spells that out in in greater detail that it would have to come come in front of the legislature. OK. OK, members, is there any questions in regards to this? I think this was a request of The larger committee, I believe, is that correct? Is that what you said? It, it was, uh, forwarded from, uh, our the budget hearing this morning, but special language was referred to here, so. OK, do we have a motion? OK, we have a second. All in favor, say I. Any oppose? That motion also carries. We appreciate you all working on that and getting those details right. Thank you for coming down. OK, with that. Do you want to do it? OK, members, we're on, uh, education, public school fund, 5-12. I'm sorry, my, I have an old agenda that was wrong. No, no, thank you, I had the old 1, 5-9. You recognized. Or you can recognize yourself. Thank you, Mr. Chairman. Good afternoon members Katie Walden Bureau of Legislative Research Fiscal Division. I'm gonna be going over with you the Department of Education division's pieces of special language with requested changes as the chairman stated, the first piece of language for your review today outside of the batch is on page 9. This is for the public school fund. This language is the rise Arkansas carry forward language. It was originally requested by Governor Hutchinson for the rise Arkansas program, he asked through governor's letter that a piece of language to be put in that allowed any carryforward dedicated for the RISE program to continue. Into the next year in a restricted subfund for the RISE program. And the department is requesting to delete this language just to allow if there's any overage at the end of the year for them to utilize that in other areas in the public school fund. They said they are still committed to fully funding the RISE program. They just would like to clean this measure up a little bit. So that is the, and the executive recommendation provides for the agency request. OK. Members to have a motion? OK, I I guess that's motion for executive rec, uh, motion for executive rec. Do we have a second? Any discussion? All in favor say aye. Any oppose? OK, that one will carry. And we're going to 5-20. Thank you, Mr. Chairman. The next piece of language is on page 20 of manual 5. This is another request for deletion. This language pertains to the way that the teacher's salaries are calculated, um, it's become kind of industry standard that whenever we calculate teachers salaries for the state that we don't include extra duty funds. This was originally required by this special language, but the department states that they comply with this, that is included in their annual statistical report and So they just request for this language to be deleted because they are already doing it in practice, just as a cleanup measure. The executive recommendation provides for the agency request. Any questions of this one? We have a motion. Motion motion in a second for executive reg. All in favor, say I. Any opposed? OK. Thank you, Mr. Chair. The next division for your review today is the division of higher education. They have two pieces of special language with the requested changes. The first one begins on page 43 of manual 5. This is the DHE Workforce 2000 Development fund procedures. This special language originally outlined how the Workforce 2000 funding would be allocated. It provided a provision that if any technical school was absorbed by another school that that funding would also be dedicated. To the new school that they merged with, and also it provided for a transfer to occur to the Office of Skills Development. In the last session, all this language was codified and so it is now in Arkansas code in perpetuity, so the department requests to delete this language and the executive recommendation provides for the agency request. OK OK, I have a motion for executive rec. Second All in favor, say I. Any oppose? That motion will carry. Thank you, Mr. Chair. The next piece of language, um, if it pleases the committee, when we received the budget manual, there was a little bit of a markup error on the page. Um, 46, and so the department earlier this week provided a replacement page to convey the actual agency requests and executive rec if it's OK with the committee, we can hand this out now. Give us just a second, OK, do all the members have the new sheet? You want, you want to go over it? Yes, sir, on this sheet, this language was existing language at the division of higher education had that allowed them to pay for one program coordinator position that was involved with doing scholarship promotion and recruitment. It allowed the division to use the high red grants, which is the scholarship funding to pay for that position. However, the department states that they have enough appropriation and funding in their general revenue appropriation to cover, fully cover that existing position. And so they're requesting to delete this language so that they can leave the scholarship funds intact without drawing down to pay for this position, and the executive recommendation provides for that deletion. Senator Irvin, you have a motions for executive rec. have a motion to have a second? Any, any discussion? All in favor say aye. Any oppose? OK, that motion also carry. Thank you, Mr. Chair. The last piece of language for the committee's review today with changes from the Department of Ed is from the state library. It's on page 70. Of manual 5. As this committee has seen before, this is some promotional language that the state library had to purchase promotional items, as you all know, this language was codified in the last session, and so they are asking as a cleanup measure to delete this language in the executive recommendation provides for the request. motion and a second. Any discussion. All in favor say aye. Any oppose? OK, that'll carry. OK, the next item that we're gonna have is 580. And you can recognize yourself. Thank you, Mr. Chair. I'm Dalton Coleman with the Bureau of Legislative Research. Uh, the only, the only section we have to talk about for the Department of Public Safety is on page 80 of your manuals. It's the division of Emergency Management's Office of Fire Protection Services promotional items section. So basically all this does is it allows the division to purchase $7500 worth of uh promotional items from the fire protection services, um, board grants appropriation. Uh, the agency is requesting to delete this language and the executive recommendation. Uh Provides for that. Mr. Chair, that's, that's all we got for public safety. OK, we have a motion. Do we have a second? Any, any discussion? All in favor say aye. Can you pose? OK, that motion will carry. Hey, the next item is gonna be 5-88. You're recognized. Thank you, Mr. Chair. My name is Lila Walls, Bureau of Legislative Research, um, then we're gonna talk about special language for the division of aging Adult Behavioral Health Services in the Department of Human Services. This is on pages 88 and 89. This allows unexpended balances for the community-based crisis intervention appropriation to be carried forward from one year to the next. They're required to be requested to DFA in writing to be carried forward, and they're reported to ALC or JBC and the peer committee and it's also listed in the budget manual, um, the agencies requested that the name of the appropriation that is associated with the special language be changed, so they're also requesting that the name listed in a special language be changed and they're mirroring the the to that change. Um, and the executive provides for the agency's request for this one. OK. We have a motion. OK, we have a motion. Do we have a second? I have a motion in a second, any discussion on this? All in favor say aye. Any opposed? That motion will carry. OK, you're recognized for the next one. OK, the next piece of special language we're going to talk about is on pages 116 and 117 in your manual. This is the assisted living facility reimbursement, accounting for home and community-based services language. It was originally added to increase reimbursement to assisted living facilities, accepting Medicaid beneficiaries by requiring the division to submit a waiver to CMS and it required reporting to ALC or JBC on progress towards increasing this rate. During the regular session in 20. 23 to acts for pasts that require annual reporting pertaining to these assisted living facilities. Act 198 codifies annual reporting requirements for the facilities to, they report that to the Department of Human Services, and then, and that's as a condition of participation in the Medicaid program, and the department in turn uses those reports to make a report for transparency and sustainability purposes to the House and Senate Public Health committees and to Arkansas Legislative Council is required by Act 820 of 2023. And the agency is requesting discontinuation of this language because they are doing this reporting, uh, in code or as required by code, and the executive provides for the agency's request. Um, I'm gonna make sure maybe I misunderstood. You said continuing your meaning discontinuation Discontinue. OK. No, no problem. OK. OK, I have a, we have a motion for executive rec. Do we have a second? We have a 2nd, any discussion on it. All in favor, say I. Any oppose? OK, that also carries that, that motion will carry. OK, and then the next one is on page 118. This is severability language. It states in the event a single section in the appropriation Act for the division of Medical Services is declared invalid. The other sections are still applicable. Um, the agency is requesting the discontinuation of this language, they stated that they've no other language like this in DHS, so they would like it to be struck for consistency purposes, and the executive provides for the agency's request. And that's all I have. OK Right. Any discussion on this? OK, we have a motion for executive rate. We have a 2nd. Any other discussion? All in favor, say I. And oppose like sign. OK, that'll also carry. Thank you. Members within your binders, there should be a smaller binder that says request for special language and appropriation acts. It has Excuse me, I'm sorry, all the universities and colleges in it. That's the binder we'll be using for this piece of language, and you'll find the piece that Henry's gonna discuss on page 395. You recognize if you'll just introduce yourself. Thank you, Mr. Chairman, Henry Rice, BLR. Uh, this language is from Henderson State University, and it is the fiscal year 2020 budget stabilization loan repayment. And for some background in fiscal year 2020, uh, Henderson State approached financial insolvency and took a $6 million loan from the state and they made, uh, in the interim of $250,000 payment, which and the balance of the loan remained the same for several years. Uh, there was a payment schedule that was added to special language and this request, it pushes back the required payments by one year, which mirrors the motion that was, or actually the request that was made in Pier of last month, there has been some movement at the end of October, there was 300,000 withdrawn from Henderson's general revenue, uh, allocation and it was, uh, paid. towards the loan, so there's $300,000 less, which, uh, there's $5,450,000 remaining on this balance. Uh, the institution says that they intend to leave that payment amount, that's the 958,000 approximate per year the same. But the last payment would be $300,000 less in, uh, 2030 and the AECB recommendation provides for the institution request. Broadway, do you wanna Come on down. And whoever else wants to come. If you gentlemen are just recognize yourself. Thank you, Mr. Chairman. I'll make one introduction, uh, I'm Shane Broadway with ASU System. I'll let Chancellor Berry introduce himself in a moment, but on the end of the table is our new president of the Arkansas State University system, Doctor Brendan Kelly, been here all of 6 weeks. We're glad to have you. And he actually came back today, this afternoon, so we're glad to have him still here. If y'all, if you would just go ahead and recognize, um, Chancellor of Henderson State University. And just so we'll have you on record. Uh, Brendan Kelly. All right, great. Good to have y'all. Mr. Broadway, who's going to do this Mr. Chairman, after you were at the peer meeting and many other members were at the, I lost that, uh, that notion I was not gonna mention that. I'll own up to that. Uh, but that, uh, that meeting was in, uh, September, uh, prior to the 11th class day, uh, where the Chancellor could have a better idea of what his budget would be, uh, regarding this fall's enrollment. So I'll, I'll let him kind of take it from there in terms of the decision when we got back we heard your request and when we got back and we were looking at our enrollment as the census date came in, and we felt like we did have room to make that. $300,000 payment this year. So in good faith, that's exactly what we did. Personally, I greatly appreciate that. So I, I will say that. So. Any other discussion? Or any questions? While they're sitting down there. OK. Do we have a motion? OK, we have a motion for the institutional request. Uh, 2, all in favor say aye. And you oppose Again, we appreciate you coming and also doing the, uh, the payment the way you did. Thank you. Yes. Anybody else have anything they wanna talk about in here? It OK, well, uh, I guess this will be the end of our, uh, special language for the budget hearings and uh I appreciate we appreciate all of you. Thank you. We're adjourned. How about that What.