ALC-JBC Budget Hearings

Yes Remember you'll take your seats. Welcome back to ALCJBC budget hearings, uh, first up we have our uh analyst Mildred Hamilton, if you'll come up and Secretary Hugh McDonald, if you and whoever you'd like to bring. Welcome everybody. If we'll start to. With Mr. Hamilton, if you'll just identify yourself for the record and go across the table there. Good morning, Mr. Chair. I'm Mildred Hamilton. I work in the fiscal division of the Bureau of Legislative Research. Good morning, Hugh McDonnell, Secretary of Commerce. Good morning, Tammy Williams, CFO. Good morning, Allison Hatfield, Chief of Staff. Thank you all for being here, Miss Hamilton, you're recognized. Thank you, Mr. Chair. Good morning members. We're gonna start with the Department of Commerce, the administration and Shared Services. If you'll turn with me to page 158. You'll see the department appropriation summary. On your left hand side of the page, you'll note that there are 8 appropriations. There are 5 appropriations with changes overall. The summary Suggests A change from the authorized 25 amounts of appropriation an increase for both fiscal year 206 and 27, the executive is recommending $604,000. And a decrease of 9 positions. So at the bottom of the page you will know in the authorized section there's about 32.4 million that was authorized in 48 positions and if you move to the executive column in both 26 and 27, you'll note that that. Increase is 33 million for both fiscal year 6 and 7. And then a decrease in positions to now 39 positions for both fiscal years. First appropriation with changes is on page 160. This is a state apprenticeship program expansion appropriation. It was established through a miscellaneous federal grant that was approved by council earlier this year. This is a program that creates opportunities to expand registered apprenticeship in existing programs and in new occupations and sectors it's 100% federally funded by the Department of Labor. The agency is requesting 1.1 million in both years of the biennium for appropriation amount. This includes uh Request to consolidate appropriations that share the same purpose and federal funding source to layer on on the next page, I'm going to mention another appropriation called apprenticeship expansion that is going to be consolidated with this appropriation that we're currently talking about. This is so they can align their appropriation with actual grant funding and to consolidate the appropriations that share the same purpose and the same source of funding. So on page 16, you'll see in the 2425 authorized column there is 0. But moving forward in fiscal year 26 and 27, you'll see that $1.1 million dollar request and the executive recommendation does provide for the agency's request. So the second appropriation with changes is on the next page. You'll see a page 162. This is another apprenticeship expansion appropriation. It provides personal services, operating expenses, and to expand the opportunities relating to apprenticeship programs registered under the National Apprenticeship Act. This is a national act that authorizes about 400 million for fiscal years, increasing by 100 million annually for about 800 million in fiscal year 2026, the agency participates in this, and their request. to discontinue this appropriation and transfer it to the previous appropriation, so the 268 that you see on page 162 in the authorized column is not being requested for fiscal year 26 or 27 and the agencies request is, um. Agreed to by the executive recommendation. Next appropriation with changes is the Office of Skills Development on page 164. This office has the exclusive authority to award grants to private and public organizations for the development and implementation of workforce training programs. The office has to do two things. They have to consult with the Arkansas Economic Development Commission in reviewing the applications for workforce training grants on or before October 1 of each year and they are required to submit a report to the governor and the co-chairs of legislative council, and they have to report those activities and expenditures of the office during the preceding calendar year. They are funded with a variety of sources to general revenue. They get workforce development fund they get 2.5 million transfer from the division of Workforce Services as well as general revenue from the Skills Development Fund. They're requesting appropriation of 26.2. Million in both fiscal year 6 and 7. And they're asking for general revenue funding in the amount of 3.6 million for both fiscal years. This includes the following changes that ask regular salaries and personal services matching. And this is of course to align with. An appropriation merge in their program operations. They're asking for operating expenses of 143,000. Conference and travel expenses of 10,000. An increase in 60,000 in the operating expenses. This is going to support rent, office supplies and operating related travel expenses. And then the final thing is the reallocation of 50,000 from their industry certification testing line item to their operating expenses line item to support operating costs related to rent, off supplies and operating related travel expenses. You'll see all of those changes on page 164. You'll also note that there is a change in the number of positions in 2425 authorized, you'll see that there are 3 positions and there is an increase that is requested in the executive recommendation of 9 positions, so you'll see for 6 and 7 that position total increases to 12. So overall for authorizes 23.5 million, that's going to be increased to 26.2 million in both fiscal years and that is the executive recommendation. Next appropriation with changes we're gonna go to page 165 and 167. This is another Office of Skills development. program As mentioned before. This is a general revenue funded appropriation, that agency is asking for discontinuation, which is also the executive recommendation with the following changes again to emerge appropriation with program operations and you note on page 166, the authorized column has got 2.5 million. Whereas 26 and 27 do not have any requests for appropriation due to the request for discontinuation, which is the executive recommendation. The next appropriation that has changes is on page 174. This is their shared services paying account. It provides for personal services, operating expenses for the cabinet level staff, and then the shared services in the department and that includes their HR, their fiscal, their IT and their communication sectors. The funding for their appropriation has a mix of revenue sources, and these are transferred from each of the divisions that utilize the shared services appropriation, so there's gonna be cash, federal, general revenues, and special revenues, and you'll note in the funding sources on page 174 that you'll see that 2.4 million in shared services transfer. These are all transfers that the end of a individual individual divisions made into this appropriation to utilize those services. The request for the agency also includes a discontinuation of 6 positions. And the restoration of one position that was originally approved by council back in March of 2023. Executive recommendation allows for those requests in addition, the reclassification of 7 positions and the discontinuation of 4 positions with the associated regular salaries and matching. That is a conclusion of my presentation for this division, Mr. Chair. Thank you, Ms. Hamilton, uh, Secretary McDonnell, you have a statement before we go to questions. No statement, no. OK. Uh, got, uh, representative Tosh. You reckon. I appreciate all the help over here. I'm surrounded by just make sure I understand, uh, on this request. I know you consolidated some of these funds and, and I understand that. I guess what I'm looking at at the bottom line when we're looking at the 25, 26, we say $26 million overall, how is, how much of an increase that'd be on page 164. How much of an increase. Is that even after the consolidations and taking that into consideration, what would be the increase in that budget. Representative, thank you. Um, the net increase is $50,000,000. OK. And one of the things that I really wanted to inquire about, and I appreciate y'all being here. That is not in this line I item budget is uh is our workforce development facilities that are located throughout the state. I think there's uh around 31 of those they're in our high schools and uh, You know, they are great programs and I'm not seeing where the funding at is for those particular workforce facilities because I know like up in my area we have one there at Jonesboro High School, and I think they've got like approximately 950 students enrolled in that and it's forever school in that area which is, this is, this is the way it is all across the state every legislator here is going to have a workforce facility in their area, one of their high schools that every high school takes it. advantage of. So my question is this trying to find out where the Department of Commerce is at in in regards to the funding for those workforce facilities, obviously I can't see it here. So, uh, only way I know to do it is just ask you a question. What is the funding for those facilities and I guess, uh, are you looking for somebody to come up and answer this question, so I'll give them time to get up there. Uh, Cody Wait's, uh, director of Workforce Connections, uh, thank you for the question. So the secondary career centers are funded through vocational center aid, which is public school funds, the Office of Skills Development administers those funds through a process and an MOU with ADE and division of current tech ed and so you won't see it in this budget, you'll see it in the ADE budget and Department of Current Teched. The budget, uh, historically was around $20.1 million. It was increased recently to $23.2 million and to be quite honest, that we've had such growth. Within that, within those centers across the state, which is what we want, but we're in a situation where we need to probably look at increasing that funding long term if we're going to continue to sustain them at the levels that we are today. And I appreciate that answer, and I couldn't agree with you more. I think it definitely needs to be increased, but on that same note, it's been brought to my attention and and that instead of increasing the funding for those workforce facilities, it's my understanding that next spring actually the funding per student that's enrolled in those facilities has actually been cut in the number I was given, it's been cut like $600 I guess depending on which tier level you're in. Uh, and I know you, you know, I'm really, I don't understand that. I think depending on what type of, uh, skills you're trying to obtain whether it be mechanics, nursing, CNA, uh, plumbers, they, uh, HVAC, whatever it may be you list those on tiers and then it's my understanding that depending on which tier you're in, that student for that school, that funding has been cut by a considerable amount is, is that sure, is that true? Yes and no. So the funding, um, currently in tier one is $8000 per FTE. Tier two is 5500, tier three, I think is $3000. The career Education Workforce Development Board and the office of Skills Development of about a month or so ago, had a meeting in which the projected enrollments are, are the revenues that are generated from that are going to exceed the amount of money in the available budget. And so they were forced with making a decision as to how they live within that budget and so they made a recommendation. And I provided that information yesterday. I don't exactly, I can't remember off the top of my head how much those reductions were within each tier, but I can tell you is that on November 4th, uh, myself, the Office of Skills Development, uh, Department of Higher Education, Korean teched, a couple of two-year college presidents or their designee as well as a couple of superintendents that administer the, the secondary career centers are getting together to try to figure out what are we going to do in terms of how do we solve that, what other mechanisms can we create and how do we fix this, you know, and, and bring something back to the committee and the board so that we can. solve the issue moving forward. Appreciate the answer. My concern is this, and, and, uh, my concern is I understand and I know going forward you're gonna look and you said yourself that the funding for this program needs to be increased, and I appreciate that, but that's not the immediate concern. The immediate concern is starting in the spring semester, the number of kids that won't enroll in this program and we all know the priority for this state right now. One of them is workforce development and this what these 31 schools do. Across the state is exactly what we're looking for is to our workforce development in, you know, across the state of Arkansas, and here we are cutting the funding for the spring, uh, I guess the spring term and it's my understanding that looking forward that there's some. Talk about even cutting it further for the next year fall term, and that really concerns me if that is actually something that is being considered, uh, uh, so I like what you said it needs to be increased, but I'm not seeing that even though we say that I need to know that that is actually going to happen because the last thing I see that we need to do is be cut cutting funding to our workforce development. I mean, these are students and you know as well as I do that not all of our own, uh, a career path for a college for a four-year school. This gives them the skilled and personalized training in all of these areas that we talked about, I, I heard one of the senators the other day in public health talk about the need for more nurses, these workforce development schools, that's exactly one of the areas that they help with, uh, and so I guess what I'm, I'm just trying to make sure of is that That we are not in any way going to cut any funding because the last thing I want to see happening is students that want to enroll in these high school workforce development programs are told no, because there's not any money there for them, and, uh, so I guess what reassurance can you give me at this point that that's not gonna happen. I appreciate the question. I think two things. One is that's exactly what the group of us are getting together and why we wanted to bring in to your college presidents that are overseeing these centers as well as two superintendents, because you got to remember of the 31, probably 26 of those are on the backs of a two-year college, 4-year university, and a technical institute, the others on a high school campus, and so we've got to figure out a solution that works for all, um, you know, and not, not every centers, you know, equal, but what I can say is that's exactly we're only gonna have 2 meetings. We're gonna figure it out within the next 30 to 60 days. That way we can put a fix going forward. I don't want to see the reduction happen. The growth, we had a 23% growth in our tier one program of study, which is a lot of your trades type stuff, right? construction, manufacturing, robotics, industrial maintenance, all those types of things, which is great. That's exactly what we want to see. The growth happens so fast that we didn't have enough budget available, so we've got to figure out where to go find that money as well as how we're gonna allocate it and maybe even redistribute some of those funds within the tiered programs and that's what that committee is gonna work to solve. OK, and I appreciate the answer. So, Mr. Chairman, uh, based on the answer that I just heard and knowing that we're moving forward, uh, I would, uh, I would request that uh this budget be flagged for session. OK, we've got flagged and and I may ask a question. We, we have department of Ed coming up November 12th, Tuesday, which is the day after Veterans Day. Would it be helpful if we can get Y'all together I'd like to have some straight answers on this before we get to that. If we can and have some people working together with what Representative To talked about we're, we're not looking for cuts in the program. Sure, yes, and I think that's fair. I mean, our, our first meeting of that committee is going to be on November 4th, um, so I don't know, and you said that meeting is November uh departments schedule being in here the the 12th. OK, yeah, so we'll have some, some discussions and some conversations between now and then that we can brief you on. Very good. I appreciate you having that information. Thank you, Mr. Chair. Thank you, uh, going to Representative, uh. General Mark Barry. There you go. Thank you, uh, Chairman Rice and Secretary McDonald, thank you for being here today. So, uh, Senator Stubblefield, representative Eubanks, and myself, we need more money in our district. And so my question is about uh the wine center funding for the, the wine center, where are we at in that process. We are at, uh, we've accumulated about $3.5 million total. Um, since that, uh, legislation was enacted and we accumulate about A little over $500,000 a year. OK, so this be, I think Representative Ewbank's legislation was in 2017, I believe. So at, at what point are we going to start seeing some progress to get that, uh, uh, facility. Uh, completed. I mean, that's a good question. I mean, I, my opinion is there's. The dollars that are being collected now, um, Our our for a wine tourism center, right? Um, it's not enough to sustain the an operating wine tourism center. Uh, that's, you know, has any substantive. Uh, size, I have to disagree with you there, the wine industry in the state of Arkansas is, is huge. And, uh, and it's very large in my district as well as, uh, Representative Eubank's district. So, well, we can't keep kicking this can down the road. So hopefully, at some point, we'll see some, some movement in making this a reality. I forgive me, I I may have missed most. I, I didn't say the wine industry was not substantive. I said that the Um, the, the tourism center based on the level of funding that currently exists would not be substantive. I don't think you, I don't think you can operate. A wine tourism center based on the the revenues that are being collected today at about a half a million bucks a year. So we need to drink more wine. Well, that, that would be, that would be one that would be one solution. Thank you. Thank you, Chairman. Always a solution. Uh Representative vote and you recognized. Thank you, Mr. Chairman. I have a question of the chair. Are we gonna talk about the audit findings. Represent Wooton, the audit findings, you can, we can bring up and do that, uh, our, the chairs before we started this, they've been through committees and also so that's open for request. We just didn't do automatically on everything because you seem to get bogged down sometime when it's already been through committees, but you're more than welcome to make that request, the question I have, Mr. McDonald, on on workforce services. I have a report dated the of, uh, September shows that you have 393 vacancies. And uh 237 of those are over 2 years old. But where I get concerned is this. You have 519 positions. That are shown as Positions for 2024, you have authorized 782, and then you have a vacancy of 393. So the numbers unless you've, unless you're cutting 400, or you got 400 vacant positions that just give you 119 employees in In the workforce services. And it's that way throughout. The report Yes, sir. Um, there are 782 positions authorized for the division of Workforce Services, and we budgeted 526 of those. Do what now? 526 were budgeted. Are you you're using 526. Yes, sir. OK. So, The 393 is on top of the 526. Yes, there are special language that allows um the department to Request additional positions through extra help, and that was, those are actually post COVID, and so we're moving forward. We're not. Requesting those be um continued. OK, then follow up on that, on the The uh the Department of Commerce is the the 48, is that your central office while we referred to. When I was director of the Department of Commerce, we had A central office is that, is that what that represents that 4048 positions, um, include 35 for shared services, which none of those are are not budgeted, and 13 for the Office of Skills Development. OK, and you have 20 vacancies. So how many people do you have working? That's what I'm, that's the same situation as in workforce services. Do you have, how many people do you have currently employed or and working in the central office. In the central office as in terms of, um, the executive staff for the secretary's cabinet. There are 16 positions. And then an additional 9 that support the shared services for AEDC Office of Skills Development, Waterways, aeronautics. So a total of 25. And then 1 of 25 and 99 that are not vegeted. OK. Mr. Chairman, it's, it's still confusing to me. I understand also that y'all may be preparing to give up 63 additional positions. Is that correct? No, sir, not, not today. We are, I mean that's being considered. Yes, sir, we are, how did you come up with 63, 2 weeks after we're in 3 weeks after we're in budget hearings, did you just find those positions or or and if you're talking about them, what, what, what's the conversation? No, sir, we're actually going through a very comprehensive review of this, of all of the authorized levels and authorized appropriation. So this request that you see before you today has a reduction of 1.2 billion in in appropriation and spending authority. We are um Looking at additional. Reductions and we are planning to present that at a later date via governor's letter so that would not be for consideration today. Those reduction in positions. Pardon me, but I'm, I'm like uh Representative Tosh, you know, talking about is one thing, raise having having adequately funds is another having Known for a year and a half or 2 years that this budget hearing was coming up. I don't understand the delay in coming forward with your reports. And coming forward with your numbers of 63 more in addition to the 359, which I'm grateful for, and I know the taxpayers will be But I don't understand 63 more put you over 400 positions. Yes, sir. We're also, um, in the process of negotiating a new cost proposal for the division of Workforce Services, and also changing the cognizant agency and so due to those considerations, we thought it would be best to wait until um the beginning of the year when we have a provisional right established, so we would know what those staffing levels would be. So what are we doing with the budget then? I mean, how, how, how, how is this going to impact what we do today if we're going to have to change it by the end of the year. I don't I don't understand the process. Well, it, it shouldn't change the numbers, it may, um, It may change where the appropriation sit, but what what we're requesting to do today is to reduce any excess spending authority. Well, all right, thank you. Thank you, Mr. Chairman. Thank you. Senator Chesterfield, you reckon that? Yes. Thank you, Mr. Jamie's gossiping and making me miss my turn. She's wanting some of that wisdom to just absorbing it. Good morning. Uh, it's good to see you. How are you, secretary? uh. Cody. What I'm interested in, um, Proposition one is on the ballot. It would give us an opportunity to use monies that we've never had before. For individuals who are going to our trade schools. Do you anticipate? Being able to work even more closely with higher ed. In order to make it possible for more people to take advantage of the monies that I believe will be available coming soon, or have y'all even considered what you're going to do with it. Um Thank you, Senator Chesterfield. It's good to see you, um, yes, always a pleasure seeing you, Cody. Yes, ma'am. We, uh, I mean, we, myself and Commissioner Ward meet every 2 weeks to discuss various initiatives and so, um, obviously supportive of, of that, you know, and I think that, you know, the funds that will be generated for that, while they may not be able to be directly attributed to kind of the secondary career center model, they will be able to be moved towards workforce development training programs to a population that hasn't been able to access them before and so we do see that as a positive and we do see that something that we're gonna be able to establish and leverage in certain different workforce development areas. A lot of times, you know, there's certain restrictions on funding mechanisms that don't allow funds to go to one area or the next, this will open that up for individuals. I'm also interested in your definition of skills development. You and I have had a disagreement sometimes on what. Particular entities or what particular um avenues. are defined as skill sets, and one of those things is an education because I don't see us emphasizing enough the skills that are necessary for those support services that are a part of the education community, such as uh the para educators, such as the CDL needs for bus drivers. Are we working more closely with our public education systems to make sure that the skill sets that are necessary to make education more uh. Um nimble if you will. Are we working more closely with them because I know we, we had a disagreement about whether or not we wanted to be able to use some skills money in order to be able to fund individuals getting, uh, training in the practice or being able to take the praxis. Are we being a little bit more nimble in that area. We are, we've started to fund, you know, one of the things that we've done recently in the last, I'd probably say at least 12 months, maybe even 18 months is we partner with the Department of Education on their teacher apprenticeship programs and so skills development fund. have gone to support that effort across the state and so some of the funding that's generated or that is required by the individual participants that are the teachers or the parents that are going into apprenticeship programs to become teachers and licensed teachers. We've been the, the funding stream for that, and so that's one area in which we've supported that. So we won't be angry with each other over that anymore, will we? Hopefully not that one, no, ma'am. Thank you. Thank you, Mr. Chair. Thank you. Center love, you reckon. Thank you Mr. Chair. Cody, you should have avoided that, saying that to Senator Chesterfield, but OK. Uh, well, good morning to everyone. I just wanted to answer a a procedural question, uh. Mr. Chair, did we say that we were gonna hold. We're going to flag the budget of office skills development. Is that, is that what we said we were gonna do, Kevin. Yes, yes, sir, that, that was flagged for a hole during the session. So when the bill is drafted by adopting a recommendation, you give us authority to draft the bill. It will hit joint budget and then it will immediately have a hold on it by Representative Tosh per his request. OK. All right. That's, that's what I need to clarify. Thank you. Representative Richardson, you recognized. Thank you, Mr. Chair. Good morning over here in the corner. I had a question back on page 164. Uh, on the operating expenses, I, and I don't know if I heard you explain to us the spin was 53,000 for 22324, and then you're asking to increase it by 300,000. What's, what's the ration for that? Thank you. That is actually the merging of two appropriations. So if you notice on page 166. There zeros reflected in the request and executive recommendation columns. Those have just been moved into this one Fund center. And what was the other one? 166, what was the other one that was merged. So the operating expense there of the 136 that you ran. Is what's being merged. The 143 and is moving into the 353. OK, so that still leaves you $150,000. Where, where is that coming from? And, well, there's a transfer from industry certification testing. Relocating existing appropriation. Along with an increase for um. Increases in rent And travel in operations. So it's actually just merging to fund centers together. OK, and then it just, I just wanna make sure I understand what fund centers are being merged and you're telling me that 502 The one, I'm sorry, I don't wanna say all the numbers ZO9 and C10. OK, but that, that still doesn't get you to 300. Which is the request, right? 3 plus the 100,000 plus the 143. Plus the 50 plus the increase. There is an increase there. Yes, sir. OK, uh. no more. We're going on to. OK, and uh I'd take a motion for exec correct. Yeah 2nd Motion is 2nd all in favor I. Post It is passed we're going on to Miss Hamilton on uh The next section. Thank you, Mr. Chair. We're going to move to page 177. This is for development finance Authority, their department appropriations summary is included on this page. On the left-hand side, you'll know that they've got 5 appropriations. There are 3 of them with changes. I'll go over those changes briefly. The authorized appropriation and position count for 24, 25 was 60.4 million and 55 positions. You'll know it moving across the page left to right in the executive column for both 26 and 27, there's reduction in positions by 3, so you'll see 52 positions in both fiscal year 26 and 27 and then a reduction of approximately 17.5 million for both fiscal year, which is the executive recommendation on the first appropriation with changes. You'll see it's on page 178, 179. This is their operations appropriation. It provides for all the operational costs of ADFA, including the federal housing assistance program their head to home program and other financial programs funding for the appropriation is primarily from federal and cash funds. They're requesting, uh, appropriation amount of about 25.7 million in both fiscal years that include the following changes they would like a decrease in the grants and aid line item of about 6.6 million to remove underutilized appropriation, Miss Williams just explained that they're trying to get rid of a lot of as appropriation. There's also a request for an increase in 29,000 in capital outlay to replace any aged vehicles. The executive recommendation does allow for this in addition, the reclassification of two positions and the discontinuation of 3 positions. You'll note the changes on page 179. As I mentioned, those changes are in position so you see the 51 and authorized going down to 48 in fiscal year 26 and 27, and the overall appropriation amount changing from 32 million to 25.6 million in both fiscal year 6 and 7. And then the grants and aid line item you'll note there's 6.6 million and authorized but zero moving forward and in capital outlay you'll note that the 23,000 increases to 29,000 for both fiscal years. Next appropriation with changes is on page 183. This is their DIS IT appropriation. They use it to purchase on behalf of Department Transformation and Shared Services, their IT equipment funding is for cash revenues derived from bond proceeds. They're asking to discontinue this appropriation for both years of the biennium, which is the executive recommendation, and you'll note on page 183, that there are zeros all across the board. They were authorized 6 million in fiscal year 2425, but they're asking to discontinue this appropriate. which is the executive recommendation. Moving to pages 185 and 186. This is the last appropriation with changes. This is their NH sorry, National Housing Trust Fund grant appropriation. It provides for the construction of rental housing for extremely low income Arkansas veterans. Hold on a second, I'm sorry. brother. Sorry, Appropriation provides a grant or transfer to the Arkansas Housing Trust Fund on page 184 and it is uh for grants, loans, loan guarantees, and loan subsidies. It's funded by general revenue. This is the appropriation that they are requesting to discontinue. I misspoke earlier. The executive recommendation is for the agency's request and on page 185, you'll see that this is an unfunded appropriation authorized amount was 5 million, but going forward in fiscal year 26, 27, there is no for appropriation, and that concludes my presentation, Mr. Chair. Apologize for the confusion. I have bragged on staff. I'll continue to bragging on staff. Y'all do a wonderful job. Uh, representative uh Cavanaugh, you recognized. Thank you. I'm over here. My chair keeps going down, so I may be on the ground before it's over with, so, but that's another problem. Um, my questions are gonna be on page 179, 181, and 187. And I give you all of them because they're all kind of similar questions. Um, the first one on 179, um, I'm just looking at your funding source and there's a big, um, difference in what, um, we actually received in funding and what we say we're expecting, are we expecting? that much of an increase in the federal. Funding for, um, Adam wants and 179. This is one that's got the HUD program, the federal housing programs. Are we expecting a, a big bump up in what we're expecting the feds to give us. Yes, that's correct. Mark Conan, president of ADFA, um, yeah, that's correct. Some of the programs, um, have been increased because of uh ARPA funding and so, um, they're different depending upon when we hit certain milestones, we get additional funds or additional tranches, as they call it. So we're expecting there to be a pretty significant increase, uh, next, next couple of years. OK, well, I thought our ARPA money was all gone. Um, uh, several of the ARPA programs we have stretch out over pretty long periods of time, um, anywhere up to 9 years, and so they keep as we reach these certain milestones, they release additional funds. And on, uh, 181, which is a student loan authority. If you'll notice, and I'm assuming the professional fees are the loans that y'all purchased. Is that what that line item is? They are for servicing fees. Loan, loan servicing. So that's actually how many loan services, so exactly what are you purchasing? Um, it is, so when we go out and make loans, um, we have a loan servicer just like a mortgage servicer that sends out statements and collects things, does defaults and different things. So that's the fees, um, that we would pay the loan servicer, and then, um, there are also, uh, compliance type fees that are in there, but it's all has to do with servicing the loans themselves. How many loans do you have outstanding? I think it's currently. right around 10 million of private loans. OK. And I noticed that we're jumping up our highest servicing fee was back in 1718 of $1.5 million and it's been going down since then. I noticed though, but you're at, you've reduced your appropriation, but you're still well over your spend. Are you, are you anticipating actually getting originating more loans and doing more loans. Yes, that's correct. And so what you're seeing there is previously it was a federal loan program, the old Fel program and when the federal government took over student loans and it became the direct loan program. We had this previous portfolio. And so, uh, we sold that portfolio and so instead of going out and issuing debt, we've been using those proceeds to make private loans to Arkansas families. And so you had kind of a larger balance, if you will, that we sold so our loan servicing cost was higher. And then we went to essentially 0 because we started making private loans, so the loan servicing expense, you know, dropped off pretty significantly. Well, as that's ramped up, um, I'll give you an example, the average rates around 11.5% nationally, and ours is about half that. And so we've seen a pretty significant growth in the program in Arkansas universities because it's, I mean, just to be frank, it's a pretty good deal for Arkansas families and students. OK, so are we, um, When you sell those loans, how much of a discount did you sell them for? we actually sold them for, um, 100.79%, so they were actually sold at a slight premium premium because of them, um, the federal student loan forgivement program, does it affect these loans? No, that's more on the federal side, you know, on the direct type loans. Um, it doesn't, um, it doesn't, yeah, really. Apply to these. OK. And my last question is on 187. And it's along that, um. And this is the actual federal housing program. And it shows that our highest was actually 8.6, which is 23, 24. Um, but we're showing that we're the federal again is much higher than that. Is that because we are still, are we expecting additional funds to help with this program for the feds. There's some pin up, uh, it, as you, as you go forward year to year, sometimes you expend more funds. Uh, just depends on what the developers, you know, in the state and out of state request. And so we get the same amount. It increases a little bit each year. And so we're just, we have a little bit of pent up demand that we haven't, you know, put out there into projects. And so we're expecting that's going to be more the next couple of years. Um, so that might be a little high, but we're expecting to get more out the door. if you will, to, to, um, projects, multi-family across the state. OK, so, Just, if you don't mind to educate me just a moment, so that bent up demand. Um, if we gave out 8.6 million, but we're asking for appropriation of 15 million. Are we saying that the feds will give us as much money as we need for the projects that we could have, there's ability to get that money. Yeah, that's a good question. They, so we'll get a set amount a year and it, and it increases each year. And so you usually have about 4 years to get it out the door, right? So we may have some funds from, you know, 4 years ago, and then you'll go through a period of these, let me start over. Nationalizing and Trust Fund is, um, money is used to rent to 30% area meeting income and below. So it's pretty, pretty low income. So a lot of times we have quite a bit in Arkansas just saying. So yes. And so sometimes the developers, you know, don't want to maybe use that funding because they have to go so low on the rents because those rents are restricted by HUD. And so sometimes there's just not an appetite for using those funds. So you could go back 4 years ago, and then 3 years ago and 2 years ago and 1 year ago, and each year you're getting more funds, but maybe they're not being used over that four-year rolling average, and so they can start stacking up on you a little bit. So what we have to do is make some type of incentive um for them to use those funds. OK, thank you. Thank you, Mr. Chair. Thank you. Representative Collins you recognize. Thank you over here to your front right, um, so I'm just looking at the, uh, housing trust fund transfer that uh appropriation taking, going from 5 million to 0, is there another funding or another funding authority source for the Arkansas Housing Trust Fund, or is this it? So, um, my understanding is that this was, um, you know, put into legislation many years ago. Um, I believe it was, I'm gonna get the year wrong, but I believe it was during the BB administration and it was funded at one time for about a half a million dollars. And, um, but it has not been funded since then and it, I believe it it came out of general revenue and that's where it would come from and so it has not been funded since then and essentially that Arkansas Housing Trust Fund, um, it was real popular during that time for states to mirror the National Housing Trust Fund, OK? So they were trying to come in and say, hey, we're gonna, you know, support these affordable housing efforts. So we're going to, you know, do something as well. Normally it would be at much higher amount, you know, maybe, you know, I don't know, 1520 million or something. And so the National Housing Trust Fund dollars essentially accomplish the same task and so this hasn't been funded in a long, long time, and so we were just saying, hey, we don't really need it. It's been, you know, it's been in our act. We haven't used it. It hasn't been funded. And so let's just use national housing Trust Fund dollars for the same projects, essentially well I guess I might ask if you think that really is sufficient. I mean, Uh, it seems to me like housing prices are very high in Arkansas and people are really struggling with the cost of housing, particularly right now, so I'm kind of perplexed as to why we're taking that from 5 million to 0 rather than considering funding the appropriation and even increasing the appropriation to address the issue. I mean, do you really think that the federal dollars are doing the job here in Arkansas? I do, I do. And I think it goes back to the previous question about we've got some, you know, pin up funds. A little bit, and I don't, you know, we probably need to make sure we're utilizing all of those and putting those before we, you know, come to I don't wanna ask you guys for any money and I haven't, you know, when we've got some pent up federal dollars. Well, that may be true, but then we're getting rid of this funding authority and it would have to come back anew through a new bill because again it's like we're effectively repealing the bill, right? If we're getting rid of the fund. I will say I don't anticipate, you know, that we would need the money to be honest. Um, we have other funding, home funding, and we have several different buckets of federal funding and it's been sufficient and looks like it's going to going forward. So I don't expect to come back and, and, and ask for it to be honest. OK, yeah. Thank you, Senator Leyding, you reckon? Thank you, Mr. Chair, to follow up on Representative Collins' questions because he asked a lot of the things that um I was gonna ask, can you give us an idea of just how much is available in federal funding since we're getting rid of this. Appropriation You know, I, I wish I would have, um, you know, brought that with me of all the different funding sources we have, you know, but I'll throw out a few numbers. Um, you know, we have around $30 million of home partnership program funds, you know, we probably have, you know, I don't know, $10 million national housing Trust Fund. So it's, it's a pretty significant, um, you know, amount of funding out there. And normally what we do with these funding sources is we pair them with, um, light tech, low-income housing tax credits. And so as developers come in and, and build projects across the state. We use those for gap funding. So the, the low income housing tax credits will provide equity up to a certain percentage of the projects, and then there's this gap to get the project done cause most of these are, you know, they're 20 $30 million projects. And so they, if you go get a bank loan, a lot of times they won't cash flow because the rents are restricted by HUD. It's not like a market rate deal when you charge wherever you want. So they need some low-cost gap funding. So we're talking about national housing Trust. You can borrow it for 30, 35 years at 0%. You can borrow home funding for around 1% over 35 years. So it, we, we have, you know, we have, you know, funds out there, but, um, and we, we're actively, you know, funding projects, but you're just getting more each year. And so, um, the nice thing is, is that we're getting a new developers, you know, coming to us and we're getting more projects and so that's, that's a good thing. OK, because that's good to ask me my next question. So developers are actually making use of these funds. They're not just sitting there, and they're just being replenished. Over time, yeah, that's correct. Yeah, and what we've done is we'll control the flow a little bit because we don't want any of the funds to go unused. And so what we'll do is we'll increase the amount of funding that's available for each project. If we get a little pin up, you know, funds, if you will. And so we'll increase the amount that the developer can receive on a project. And of course, they're always willing to, you know, they're interested, you know, in getting more if they can because it's more gap funding. And so, and that's what we've been doing in the past. You know, 3 years or so is increasing the amount they can receive because we want that now, we want to have plenty for projects, but we also don't want to be sitting on a ton of money. You know, OK. Well, I think I would just echo and Collins's concern. I whether we're going to fund it or not, and I really think we should. I'd still rather keep the bucket than just get rid of it completely. Thank you, Mr. Chair. Thank you, Representative Springer, you recognize. Thank you, Mr. Chair. Good morning. I'm over here. So I, I, I, I'm trying to understand what you just said. So where, where are these federal funds in the appropriate, your appropriation. Where are they? Where are they? Who what where can we find those for? Tell us where they are, so we'll know that they're actually there. Yeah there we go Give me just one sec. Yeah. Yeah What page are we on? Um, let's see, 17. So under the um NHTF grant, that's the national housing, uh, Trust fund dollars and then there most of the funds come from 3 different sources. National Housing Trust Fund, you see the 15 million there. The home partnership program, it actually doesn't run through the appropriation. That's a, uh, comes straight from the federal government and then also the low income housing tax credits you won't see here because that's actually through the Internal Revenue Service program. And so, The way it works is we administer the program, we don't actually get the funding. Were the administrator of it and so investors actually buy those tax credits and so the developers deal with either a syndicator or they deal with straight with the investor, and then the investors buy those tax credits in the developer gets the money and then they use the money to build the project. So the only thing you'll see here is the National Housing Trust Fund, but not the low income housing tax credit or the home partnership. dollars, Mr. Chair. Ma, Mr. Chair, may members of this committee get that information that he just communicated in a written document, so we'll know because we have constituents that are concerned about, you know, housing dollars available for that. That would be great. Thank you, thank you for you Kevin's got that noted. Thank you. Appreciate that. Uh, going to representing Pilkington you recognize. Thank you, Chair. Thank you for being here today. Um, what I think is interesting is this doesn't seem like a ton of money in this fund, uh, and so we want to get the best use of it as we can. And so I was curious as we try to use these funds better in the future. I mean, 20 to 30% of new housing costs come in in the regulatory process. Is there any efforts by the Department of Commerce to streamline or improve our regulatory process when it comes to building, uh, housing in Arkansas. You know, most of that is done at the local level, you know, to be honest, um, when it comes down to zoning, all the way down from zoning to, you know, how wide the sidewalks have to be. And, um, you know, that's one of the things that we have typically not gotten involved in is the, you know, the local zoning issues and local, you know, housing code, but You know, occasionally we will, you know, we'll work with the developer to try to, you know, get a project moved along. I know there's been a lot of talk with some of the members in here as well as, you know, is there anything we can do on the state level to, you know, kind of fast track some of these projects because affordable housing is such a a big issue, but a lot of times they kind of get bottleneck in a little bit of the, you know, local, you know, bureaucracy of things, whether it's the water folks or the engineers or the, you know, there's a lot of different people that are involved. in those things, so we typically haven't gotten involved in that, but occasionally we will help developers if they just run into something that's really, really slowing the project down because they are on a timeline they have to use these funds in a particular timeline. Yes, so just so I'm understanding you correctly, unless There's an outstanding situation you typically are not looking at any sort of regulatory reform to improve housing. Um, that's correct. OK. Representative. Thank you, Mr. Chairman. Um, my question is on your um She that we were providing for the Department of Appropriation summary. The fund balances uh 40054445 million and uh you're Excess appropriation is $446 million. Yeah. I know you must draw interest on some of that, if not all of it, where, where is that interest income shown under funding sources. Yeah, I can answer. You, you're referring to the, I guess the interest income report showing interest in the state treasury. Is that what you're referring to? Any interest income that you earn. Do you earn outside? Yes. OK. Yeah that's correct. What's your total amount and where is it shown in your department. We typically, if you look at our statute, don't have funds in the state treasury, it says that we hold those in commercial bank accounts, and so that's probably why it's not showing up because it's, you know, not interest earned there in the, in the state treasury and so, um, but we'll typically I believe this past year we'll learn. $5 million or so. 5 million or half billion billion be, is that Department of Commerce? Yes, sir. Um, The division of aeronautics, they have a cash fund and they earned um. $10 and that is reflected in The, the budget manual. Do you have do you want me to go through each, each division. Some of those are balances like that also reflects like the treasury note balance. I realize. That's the state law requires if you put it in the treasury, you get, you know, interest. But you also receive money. Several million dollars, not 5 million, but several million. And so what I'm saying is that is not shown here and it's income and how do you treat that income. Do you give it to the agency that had the uh Investment, or do you use it in other departments and it's just a question that of, of worries the interest income when it's when you're talking about a half a billion dollars for our particular agency, I, I know what you're getting at. So if we get funds, say, uh, from the federal government, and we have these different programs. We call it program income. So when we earn interest on those funds, we put it back in to those programs. So if we're doing a project, it just builds the project funds for availability for the projects. Well, we don't use it to run my point being that you can show funding sources of $445 million OK? That comes from all through your department, all through all of your agencies, you had to pull a number together. Is it a problem for you to show one number where interest is a category of income. Do you follow what I'm saying whether we even when I, when I look at uh General Rabin, you know exactly what you have in general revenue. Why can't you have a column maybe right below and I don't I'm getting too detailed, but maybe right below fund balances. It shows interest income. Yes sir, I think that in the budget manual that may be reflected under other, and we do have. those interest, um. Well, I tried to find other, and I don't see it on here, here it is. $30 million. On half a billion? No, sir, I'm saying like in the in in your budget manual on each individual fund center on those pages where you show the fun balance. Yes sir. That's so you have a number forever, ever investment. Yes sir, I have it here by business area, come up with the total number, so the taxpayers of this state will know, one, the money's being invested 2, it made X millions. And not, not 3 million, not 5 million, but several. Million dollars on a half billion dollar investment. Do you follow what I'm saying? Yes, sir, for Arkansas Economic Development Commission for their bond fund, which is approximately the balance is 13 million they made approximately $500,000 in interest, so that's important to, to, to, but to lump it all together. Thank you, Mr. Chairman. Thank you. And that's, you know, that's something, uh, representative Wootons brought up some other agencies. We're just seeking transparency because it some of these funds is a pretty good amount of money and we'll and just to let people know where it goes. Uh, Senator Love, you're the last one I've got on screen. Thank you, Mr. Chair. Uh, Mr. Coon, I just wanted to go back and clarify something you said before I ask the question, you said that in in Ho Home funds, you get $30 million or is that were you, were you? Tell me where that $30 million yeah, how it was split up before I ask my question. That would be about the, you know, current, you know, pin up funds, if you will. We get around $10.5 million a year. So once again you you you go back like 4 years and it kind of stacks up. Are you through, I think I cut you off hitting the wrong one. Let me get you back on it. Here we go. OK, so you were saying over, over the previous years, you received $30 million not the, not $30 million for one particular year. Now that's correct. And, and so going into this, um, you know, it's a lot of moving parts, but going into this uh march for live tech applications, you know, we had a pin up of about $30 million but of course we got these applications in, and you may have one requesting 2 million, 1 requesting 3 million, so. You know, I'm guesstimating that probably, um, when we turn this march, we may have 10 million left, you know, 10 or 12 million, because this latest round of applications to build projects across the state. They all requested, you know, 1 to 2 to $3 million of this home funding. OK, and then how much, how much are we receiving though about 10.5 million per year and I'm, I'm assuming that that is reflected in your appropriation on page 179, is that, is that where you, you have the 11.5 and then you have the, is that Because when you said $30 million and then I was, I was like representative, uh, Springer, I was trying to look for art, you know, where's this money? So. So I'm assuming that's that's the appropriation right there. Secondly, with the National Housing Trust Fund. Uh, I'm actually the person, uh, that actually helped pass that legislation for the housing Trust fund, so I'm a little partial to it when you say that you're gonna close it, um, but here's the, here's the question I have. So when you look at the national, the national housing Trust Fund legislation versus or the appropriation versus what we have we have set up with the housing trust fund. How many of those, how many of the objectives are similar. the same. And then with the National Housing Trust Fund, are you just funding like projects only like uh apartment complexes and different things like that, because the Housing Trust Fund had different objectives in it, so talk to me about that. Yeah, that's a good question. Um, a lot of the, um, things that you can do, um, not just multi-family, they can be single family, there can be other, you know, types of things that you can do, but they're very similar to the Arkansas Housing Trust Fund and again most of. The, you know, states including Arkansas kind of mirrored, you know, their programs after the National Housing Trust Fund, you know, the only thing I could think of that, that you could do that would might be significant with it would be is if you increase like the AMI like National Housing Trust Fund is 30% AMI area median income and below and maybe with the, you know, Arkansas Housing Trust Fund, you could, you know, increase that, but if you do increase that, then you get into where we can use home partnership program. because they're 60% and below, so it covers the 60 down to the 30. And so, you know, we've just felt over the years that with it not being funded and we've got these different buckets of money that we could kind of cover any of the needs in there that, you know, were needed in the state. OK. All right. Well then, I, I'd like to talk with you offline. Thank you, Mr. Chair. Thank you, Central Brian Davis, you recognized. Thank you, Mr. Chair. I just wanted to go back to some of the conversation we're having earlier, um, talking about budgeted but unfilled positions um with Act 796 and just want to provide a little bit of clarity based on some meetings we've had and our meeting in personnel yesterday. So yesterday we voted to eliminate the unbudgeted positions only, so there's about 422 of those positions, and we are going to study the budgeted positions to deter. determine the impact to EBD and I think one thing to be real clear on Act 796 is that the agency has to identify these unfilled positions and but over a certain amount of time, I think maybe 2 years, they cannot request, continue to request those positions, but Acts 796, With the legislature is still allowed, um, to set those positions. So we don't have to follow, they can't request it, but we still get to set the number of positions we still have that authority. So even though they're not requesting the positions, we don't have to follow it. Our hands are not tied by what the agency is or is not asking us. So we are complying with Act 796 by saying we understand the um unbudgeted positions. We've eliminated those. We agree with that. But The budgeted ones, we need to understand what that long term impact to EBD is, and we have a new employee pay plan coming, um, that could also change that. So I am of the opinion that at some point we should have a motion to study those budgeted positions after session, and I think that should be done in ALC personnel. That's my personal opinion on that. Um, but just to help bring everybody up to speed on the conversations we've been having about Act 796. Because we keep asking questions about it to the agencies, they're trying to comply with the law. We're the ones holding it up, because we want to make sure that fiscally we're doing the right thing long term. And so it's us holding it up, not them continuing to request something or not request something that they shouldn't be. So, that's where we're at. I just wanted to clarify that, um, and thank you, Mr. Chairnation and did you also have a motion in there for executive rec. Yeah, motion. I do. I have a motion for executive. I have a second? Yeah On favor I OK, thank you, uh, Ms. Mildard, if you go on to the aeronautics. Thank you, Mr. Chairman. We're moving to page 192 in your manual. You see the department appropriation for the department of aeronautics, there are two appropriations. There is only one with changes authorized physicians for fiscal year 24, 25 or 5. The executive recommendation is that this increase to 6 for fiscal year 26 and 27. On page 193 you'll note that the operations appropriation provides for exams, rating and licensing of airports, landing fields, and air navigation facilities available for the use of aircraft. The appropriation is funded entirely by special revenues derived from aviation sales and use taxes. They're requesting appropriation of 16.5 million for both fiscal years of the biennium, and this includes the following changes they would like to restore one growth pool position, so you'll see that in the. increase from 5 to 6 positions moving forward. That was a position that was originally approved in ALC back in 2023 in March, they're asking to reallocate 35,000 from their operating expenses to conference and travel to support the international and national FAA conferences. This is for professional development and they're asking to increase $750,000 in their professional fees line item to support their statewide economic impact study that's gonna affect all 90 publicly owned airports. Executive recommendation is for the agency's request, and you'll note those pages on page 194. That concludes my presentation for this agency, Mr. Chair. think was Hamilton, uh, Senator Boyd, do you recognize? Thank you, Mr. Chair. I just wanted to ask, um, This legislature voted overwhelmingly for two pieces of legislation surrounding the study of a spaceport, and I never heard back from anybody that anybody even really looked at that. Could you give me some kind of update? I realized the, the time frame has passed on the, the appropriation, but I mean, is there any consideration for that? And if not, Uh, why not? But it, it was not funded as you, as you're aware, um, but there was no real request. It could have been funded, right? Like there's no, no real discussion. I mean. What, so, so I get that, but like, is there any discussion of a spaceboard anywhere or is this just like the legislature said something and you just turned your head and looked the other way. I mean, it's not, it's, it's not part of our economic development strategy. Um And we didn't have the funds to fund $950,000 spaceport study didn't we just see that we've got 400 and something million dollars in a, uh, you know, in funds and we. It wasn't even the study wasn't even a million dollars, I mean, was there really not money there to do that? I'm, I'm just trying to, to understand. I mean, the, I felt like the legislature overwhelmingly spoke with its vote, but there didn't seem to be much. You know And So I'm just trying to understand where we are on this. Well, we, we have not. We have not made it a priority because it wasn't funded bottom line. OK. Yeah. Thank you. Uh, Senator Irving, you reckon? Thank you right here. Um, the grants that are local, the airports that are all across the state of Arkansas. Where are those funded from? Good morning. uh, Jerry Chisholm, the director for the Department of Aeronautics, um, those grants are funded from that special revenue fund. Our agencies is entirely funded from special revenue, everything from operations through the grant program. It comes from sales tax on sales of aircraft, aviation, fuel, and parts and maintenance on specific aircraft. Um, and so, and so that, that's within your, but there's not a, there's not a line item to see how much we. have spent in grants or from this in your appropriations, is that correct? Or is, where is that? Is that just gonna be an operating expenses or? Airport grant funding. Oh, it's right there. Sorry. But on your fund balance, are you able to also use the fundal for those? Part of the fund balance is committed funds that are encumbered to a specific projects from grants to airports, yes. I just want to applaud you on them because they are tremendously impactful. And, um, and you do have a People don't realize the activity of commerce that occurs when you have even just a small airstrip. It's just incredible, um, and I would just invite you to, to look at Cersei County. Um, what they have done with their airs one of my favorite airports. Well, and understanding, apparently we are out of hangar space. That is a problem that exists at virtually all of our airports across the state. We have a, a dire need for hangar space and one of the issues that we're facing as an agency is the cost of construction for those hangars continues to go up. OK. Our funding while it varies year to year, has remained considerably constant. and so the delta between what we can find and what is necessary is widening. And so that problem is something we're looking at, um, within the agency about how we change the grant program, possibly to make the money go more directly toward hangars instead of other types of projects, but at the same time we have to maintain uh the runways and the taxiways doesn't do any good to have hangers if you can't get on the right way. So it's a problem we face across the state. Are we able to utilize any federal funding for that? The FAA will fund hangers if your airport has no other need. And that happens very rarely. They're very good at finding something else that their money can go toward in lieu of funding what they call revenue generating projects. They don't support revenue generation. If you don't have any other need on the airport, they will put money into hangers. OK, well, I just, I just, again, I applaud you for it and, uh, you know, I think it would be a great thing just. For them to provide more hangar space we're out apparently and, and that is a, I mean, I don't know why you wouldn't find a generate a revenue generating project to become self-sustainable so that you don't need more grants in the future. That doesn't make any sense whatsoever to me. So, I would hope that we don't follow that, that mindset, you know, at the state level. So I appreciate that. FAA says, uh, and they do, uh, encourage airports to be self-sustainable. and we as an agency encourage our state airports to be self-sustaining and two of the biggest areas that we grant money to are hangars and fuel cells because if the majority of the airports across the state, that's the only two revenue generating forms they have. Some have farm land they can lease. Uh, we've even gone so far as to fund irrigation wells on farmland in airport property so that they can lease that property for revenue generation. So it's something that our commission and our agency takes very seriously and the 750,000 that you want to use for. For a statewide economic impact study, is that gonna be just in partnership with all the airports or do you have a date on that? I'm really interested in that 10 years ago. It's about a year-long study we hire professional consultant to do that. There's two purposes for that. One is it helps us look at the return on investment for our money to see where we've put money into airports, which of those airports are giving us the most economic impact in return for that. Second, it allows us To say to the local community, your airport, as you mentioned earlier, is a valuable asset from an economic standpoint to you and it encourages the community to put more money into their airports. Therefore, using less of our money. So the more of their money they can use, the farther we can spend hours on other projects at other airports around the state. And are you also gonna include the aviation programs that we have. I know Ozarka College has one, and I think Henderson Henderson Henderson. I hope those two will also be included in that because we need more. Apparently more people and we, I have manufacturers, um, in, in Iser County, I know, and others that are around this industry, so I think it's a, it's a, it's a good opportunity as we move forward. Thank you, Mr. Chair. Thank you. Representative Ke now you recognized. Thank you. Thank you for being here. I just want to say. Thank you for what you do for the airports. I know from, um, being involved in the Walnut Ridge Airport. Y'all, you'll help us a great deal, and we appreciate every time you're there. Uh, one thing I did want to ask you about is on your, um, federal grants. I see that we're asking for the continued appropriation on the federal funding for like $12 million. Do you see that the feds are going to be putting any more money into those grants that kind of help with general aviation. Do you get a feel from the feds that that's something that they're going to prioritize. Honestly, I don't think so. Um, that appropriation is primarily in place, uh, to support the possibility of our state becoming what the FAA calls a block grant state. Currently, as you know, uh, you're very involved in your airport. You know that when the FAA gives a grant to our airports, it goes directly to the airports, does not come through our agency. We have visibility on it, but we don't manage the money. In a block grant state, they would give the money directly to the state agency who would then determine which airports would get that money. That appropriation is in place primarily, uh, in case they want to increase the block grant program and we want to do that. Their funding for general aviation airports, uh, Congress has increased that sum, and I do see some opportunities in there for maybe possibly getting some grant money there, but, um, I like to err on the conservative side, so I generally tell our airports, don't, don't expect that and if we do get that, we'll find a way to use that to benefit them at that time. Yeah, I know with your partnership, Walnut Ridge has been able to be self-sustaining and but now we work hard at it. I mean we. I have a great manager too. I'm not gonna argue on that one, but I can't in public, but anyway, so, um, Stacy does a wonderful job with it and everything, but Without Federal assistance. The small rule general aviation airports, it's hard for them, you know, we're blessed that we're able to keep self-sufficient. It's hard for that to happen. And as similar to what Senator Irvin was saying, um, It's a benefit to the community. I don't care what community, as long as you've got a general aviation airport and it is, it, it is economic development. It does help. Um, so, you know, anything we can do to try to assist in that, just let us know. I think. Represent Wootton, you'll recognized. Mr. Chairman, that the appropriate time, I have a point of personal privilege when you can call on me. I would appreciate it. OK, if you don't have a question on this one, you were the that was the last one, so we'll go ahead and uh take a motion to executive regular motion. Have motion in a second. All those in favor say aye. both motion cases, Representative Wooton, you have personal privilege. OK. Thank you. Let me, uh, I feel it's incumbent upon me as a result of Senator Davis's comments. I altered Act 796, which dealt with positions over 2 years old. The budget is a non-budgeted positions. The question that has arisen. Is the fact that we have been funding on Filled positions for numerous years for the amount of money that we pay on employee for personal insurance. So, Our hospitalization. So what the question is, are we going to continue to fund fathom employees, and I don't think there's a lot to study. I think the decision, it was known at the time that Act 796 was passed, that these employees were funded. And a phantom manner. Each penny would each payroll. When it was cut, they received. Money agencies did to pay into the insurance pond for benefits now. The question comes up, is it legal or illegal. I don't necessarily look at it from a legal or illegal standpoint, but it's not right. In my opinion. And this was known at the time that Act 796 was approved. Now though, it's getting ready to start impacting the trust fund that they worked so hard on to develop. In the last session to cover. The cost Our cost and then the calls from the employees standpoint of the state. So the decision to make, are we going to continue to fund phantom employees that don't exist, or are we going to pay All of the general revenue, money to cover. Representative Wooton, I think that's something that the personnel committee will have to take up, that's fine that's not, it's not our decision to make it here, but that would go through the personnel. Thank you. All right, let's move on. next year I believe we're up to, um, the department, uh, Commerce Department banking department. That, that is, um, Ms. Hamilton, you're recognized. Thank you, Mr. Chair. Members, we're going to move to page 198 in your manual. This is the operations appropriation for the state bank department. They only have one appropriation. It does have changes. They're responsible for examining and regulating the state chartered banks, bank holding companies, trust companies, and other entities. The entirely funded by special revenue fees derived from bank department charter fees assessments, examination fees, industrial loan institution assessments and exam fees and various asset forfeiture proceeds. They're requesting. changes appropriation of about 14.1 million in both fiscal year 26 and 27, which includes the restoration of 8 growth pool positions that were originally approved by ALC in June of 2023. They would also like to increase by $150,000 their extra help. This is so they can hire previous examiners to return on a part-time basis to assist with specific portions of their bank examinations such as their loan reviews that I also like to increase by 331,000 they're operating expenses line item to provide for necessary equipment. And some travel. Increase by 42,000 their confidence travel expenses to provide training related travel and then to restore 350,000 capital outlay to support their vehicle replacement schedule, the executive recommendation does provide for all of these requests, including the reclassification of two positions. You'll note all of those pages on page 199. You know, the decrease, I'm sorry, the increase in positions from the authorized 2024, it goes from 78 to 86, that's an increase of 8 positions and the appropriation increases from 12.5 in fifth year 25 to 14.1% in fiscal years 26 and 27. That concludes my presentation, Mr. Chair. Representing board, you reckon? I'm sorry, Senator Board. Thank you, Mr. Chair. Uh, I just got a, I have a question on the, the state of the, the banking department and, and you might not know an answer and that's fine, but you're here today. I want to ask, uh, so one of the challenges we have in the state of Arkansas is, um, house insurance has been going up. One of the. things that other states have done is they've created catastrophic savings accounts, and I'm just curious if y'all have looked at that is any kind of possible solution if you have any feedback on whether that might be something worth pursuing or not. Good morning, Susannah Marshall, State Bank commissioner, um, no, sir, that's not something that would never typically be flowed through our agency at the bank department, um, it certainly is something we can take a look at in conjunction with the insurance department. I'm not aware of similar, uh, types of proposals, um, in my, across the country, but certainly happy to visit with you and the insurance commission, uh, if, if appropriate. I would very much appreciate that conversation. Thank you. So this make you reckon. Thank you, Mr. Chairman. Uh, this question, I'm gonna have this probably from what I'm looking at over and over again, and this is the, the, the, the part where we're increasing the capital outlay for vehicle purchases, um, insurance department has several. I haven't totaled the amount that we're looking to buy new vehicles, but it's becoming substantial. Uh, my biggest concern is, is that we roll this into an appropriation. We all sit here next year and we allow that capital outlay amount to stay, uh, consistent with the prior year, which then would allow brand new vehicles to be purchased yet again. Um, and so that's, that's a concern of mine. I, I would almost just assume these weren't in your ongoing appropriation in, in that visit with the staff to make sure there's a vehicle, but you could come and ask for the separate purchase of the vehicles because I mean, I have questions about what is the age of the vehicles? Are they actually necessary to be replaced, uh, in a tight budget environment, which I think, you know, we have upcoming, is that really what we need to be focused on spending our, our money on, um, and again, I don't know those things because I don't have all the background. So I can. Take it at the, you know, one bite at the apple if y'all would like me to, um, and I'll just say, so what are we talking about? How many vehicles are we replacing, uh, what is the condition of the vehicles that you're replacing in this particular appropriation. Yes, sir. Thank you for the question. So the job of the bank department is to travel around the state to all our banks across the state and out of state as we have banks that operate in 14 additional states to conduct the exams, the reviews, and other operations and functions of our agency. We maintain a fleet of 21 vehicles. We have uh authorization for 23, but we have not filled all of those at this time. That 21 is monitored very closely, Senator, on a monthly basis. What we're looking for this capital outlay, um, appropriation request is that on average we try to replace 2 to 3 vehicles per year. We do that in accordance with DFNA guidelines on age and mileage, and certainly there are times where there's extraordinary vehicle, uh, failures, breakdowns, and there are exceptions. To that rule as always. We have been asked to hold, uh, our replacement for the last couple of years, pending a larger study for fleet management, and we certainly are working with the Department of Commerce, DFNA and others on that. Uh, so we are looking at this appropriation to ensure that we do not get further behind and that if that is a green light to move forward with replacement, we are prepared to do so. The bulk of our vehicles also are of the large carry-all type. So think of a larger, more costly, Uh automobile that carries 4 to 5 examiners, all of their luggage, all of their materials for weeks at a time. And so our cost per vehicle is actually a little bit more, it's not a four-door sedan. It's, it's a more high-end vehicle, so we work within the guidelines, the contract, and so it's, and then we look at, uh, age and all that, the, uh, to your exact question about age, I have 4 that are over 10 years old and a 5th 1 that will be approaching 10 years next year. And so we Like those are getting to the end of their useful life. And so that's why we feel like this is an appropriate amount for the next budget cycle. Senator. Senator, I would add that uh we've had a lot of conversations in commerce, um, about vehicles. We have too many. Uh, we're trying to whittle them down and, uh, you know, I've had this conversation with uh Commissioner Marshall, you know, before you go out and buy another one, let's see within commerce if there are some excess vehicles that are in reasonable condition. That, you know, they, they would, they could use first before we go out and buy one. So, uh, it is a process, um, and. Uh, trust me, we are, we are making sure that uh the vehicles that are being replaced actually and so I think that. We're sounds like we're generally on the same page with the exception of the additional preparation authority, so I guess my question would be to staff, let's just say today there was an emergency, someone had to go out and buy a vehicle in an agency, but they didn't have. The appropriation authority to do that, would they be able to come to us in the interim and ask for an increased appropriation and to be able to achieve that. Mr. Chairman, thank you. Uh, yes, sir, as, as they can go through here to get some various temporary appropriation. I will point out that in the, the budget requirements that DFA sent out to the agencies, they did zero out capital outlay and the agencies had to re requests it that standard procedure since I've been here. So we do have that safeguard, but yes, sir, you are correct. They can during the interim get appropriation. Like, I mean, the one thing, so that would be 5 vehicles at 70,000 if you were looking to replace a bunch of, you know, I guess, suburbans or whatever it may be, um. You know, and we also hear that maybe we have an excess number of vehicles as it even stands right now in most agencies inside commerce, again, I've got, if I, and I haven't rolled through all of it because there's various places in insurance department that they're asking for more vehicles, and I don't know what the total of that amount is, but it seems to me like maybe you're conflicting a little bit with. You're ahead of the study or whatever it is on fleet management at this point and I'll be a lot more comfortable if, if that's gonna get done before session, we can, uh, re up and put in whatever the actual amount needed uh rather than just an arbitrary 350,000, um, which you all kind of know what you actually need, but it doesn't sound to me like you're there yet. In center for the bank department specifically our amount of appropriation requests also includes capital outlay for large IT equipment that we have in the past needed to replace. We maintain a dual, uh, disaster recovery site at our Springdale location, so that would encompass large IT equipment purchases for needed replacement as well as vehicles. The way that it's outlined right here, so you're saying the 350,000 is for more than vehicle replacement in your report, it does not say that. It says very specifically restoration of 350 in capital outlay to support the department's vehicle replacement, uh, schedule. Yes, sir, on the, uh, the last page, there's, um, I'm looking, I don't know if you have the same page numbers that we do. I'm sorry. um, but on the very last part of Capitol Outlay, 200,000 for the replacement of vehicles and 150,000 currently authorized to replace obsolete large data processing equipment, um, I, I, it may not have been included the same way in your packet. Senator, but we do have those broken out between the 2. 350,000 in a summary that is 4 vehicles only, which I understand that and then. And you know, I'm not gonna. Harp on this throughout everybody, but the increased conference and travel expenses again in a time when we're, we think we're, you know, we have declining. Revenues because we're trying to cut taxes and all the things we're we're doing economically, uh, or that's happening. That is also not my favorite thing to see and I, and I propose on increasing that because oftentimes we see in the interim someone will transfer that authority to another, uh, another place in their budget because it isn't the priority that needed to be there, uh, this increase in conference and travel. So if you could just walk me through on what you're doing with the 42,000. Certainly, yes, sir. So in the last 10 years we've increased our staffing by 14 positions with no corresponding request for increase in appropriation for operating expenses. Or travel conference or other budget. And so this is really getting us caught up to bringing on those 14 new positions to where we are today with the higher cost of travel expenditures. Our staff is trained on the job in the field with the banks, but it's also required that we have a long-standing history of a five-year training program that requires our employees to go to the Federal Reserve, the FDIC in DC for their training programs. It's a very, uh, detailed career path, and in order To get them to their highest level of proficiency and technical expertise. It is imperative that we send our folks, this is not just a, um, you know, uh, emerging issues. This is more on the job training that they're required to do in, in order to gain their proficiency. OK. All right. Thank you. Yes, sir. Representative Fortner you recognize. Thank you, Mr. Chairman. Just to follow up on Senator Dismay's line of questioning, uh, the vehicles you said they're 10, approaching 10 years old, approximately how many miles are on them. Just rough. I would say at least each one of those 10 have at least 75, if not more, 75,000 miles if not more. That's correct. OK, and uh, Uh, Mr. Secretary, I, I do, I do appreciate that you are thinking about moving vehicles that are underutilized to places where they can be because that's a good use of resources. Thank you, Mr. Chairman. If, if I may, we, we did an example of that last year, uh, we acquired a vehicle with commerce that was being underutilized instead of purchasing a brand new one. So we did just as we are proposing. Excellent. I love that. Thank you. Represent B, do you recognize? Thank you, Mr. Chair. I'm over here. Uh, my, my questions for, um, Uh, for the, um, commissioner. Could you remind this body how your, uh, department is funded. Yes sir thank you Senator when Represented 100% funded by the assessments on the banks that we regulate. So, so $0 of, of the money that you're requesting would actually come from general revenue. This would all cover from the entities that you examine, uh, ensure, uh, the safety and soundness for Arkansans. Yes, sir, that is correct. 100% special revenue. So I have a motion at proper time, Mr. Chair. We're just about there only a banker would have known that. Center, uh, urban, we do have a couple now. And you can take, you can take his motion. My, my question is actually, if we could get an update on the fleet management, um, study. I'm not sure who that's in, it's not Department of Commerce, so y'all don't, I don't need to ask this question to them, but to the chairs, I think it's really important. Iran legislation on this in 2011. There is a reason why FedEx uses fleet management software. There's a reason why the state of Mississippi did it. So I'd like an update as to where we are, so that you don't have to look just within the Department of Commerce to find a vehicle that might be suitable for you to replace, but it could be in the Department of Health or it could be in DHS or it could be in the Department of Ag. This is crazy what we're doing because we're making all of our agencies, no matter how big or how small they are. Also manage, you know, this, this vehicle fleet. Issue when really that should be a shared service. We have a Department of Transformation and Shared Services. This is the epitome of a shared service that can be brought in-house under one entity and then managed appropriately. And so, I, I'm not sure who is doing this study, if it's DFNA or if it's shared services, but I'd love to have an update on that with some real-time. lines to to Senator Desma's point, I mean, we've got to just be more efficient in this and this and then that will allow y'all to do what you need to do we've got a note to follow up on that. OK. Thank you, Mr. Chair. Thank you, appreciate it, Senator. This man you reckon. Well, I mean, I know there's a call for motion. I, I'll have a, a substitute if you recognize him first. That's where we are. Represent BD you want to chime back in. I'm gonna, um, offer a motion recommend approval, um, in, in the executive rig. Yeah, we've got a vote for approval of executive direct discussion. introduced my. I've got a motion for executor rec with the exception of Capital Outlay, which we would reduce to 150,000 to allow for the IT purchases that are needed, not the vehicle purchases. uh, stay with your motion or you wanna. Deferred to senator dismay. Uh, I'm going to stand by my motion again, I restate just what the commissioner said. These are monies that are collected and assessed from the entities that they examine, and if they see they need to have a need for vehicles within that department. I understand and respect the senator's position, but I think you have to look at each one of these requests, um, individually, so my, my motion stands to approve as um. Uh, at the request. OK, let me back up because I, before, when I went to to to find out what it was. I'm going to ask first for a second to to Representative Beatty's motion if I. OK, I heard a second. Now Uh, Senator Dima you call yours a substitute, correct? Correct. All right. OK. OK, uh, this may make your substitute motion again and we'll see for a second. Substitute motion is to adopt executive rec with the exception of the capital outlay line and that would be reduced by 200,000. I do have a second. a second, OK. Any discussion on the substitute motion would be taken up first. Uh, Senator Hickey, you recognize just discussion. I wanna make sure. With, with in if I could go back to center dismay. So with that, What, what I believe that Senator Dimain would be doing is then they would still be allowed to come to peer. At that particular point so that we could just observe what was happening a little bit closer. Is that? Am I missing that more direct than that, um, they would be allowed to, uh, I mean, put it back in when we get into session. I mean if they want to make an amendment and add it back in, that's great. I think what we need to do is be sure that we get through this fleet management process and if I'm hearing the conversation correctly, uh, hopefully that's pretty close to happening and then we can justify increased appropriation in In the various agencies that are, that are making them for vehicle acquisition, you're going to see later on as we move through this pack, there's quite a bit of request for increased capital outlay for a vehicle, but even if it doesn't make it into the appropriation, they would be able to come to peer and move from where they're lying I, for instance, confidence and travel and request uh that they be able to use that for capital outlay for the purpose of purchasing a vehicle. So there's several safeguards. There for them to work through my hope though is we can have a report on fleet management before we go into session. OK, and just maybe for staff and, and or even if they needed additional appropriation. They could come, they could come before Pier and ALC to get that. Is that right, Kevin? Yes, yes, sir, uh, various temporary appropriation is available for any agency. Yes, sir. My only thing would be here is that, you know, that we'd keep it consistent across all of them. I don't know if some of these other budgets that we've already passed, if that's, uh, if we just kind of overlooked that, that, you know, we need to go back and look at those so that we could stay consistent on, on those particular items. Thank you, sir. OK, Senator Chevi, you have a question on substitute motion. The rationale for it. I've heard the substitute. Uh, we are on the substitute motion. But is it, um, not OK to hear the original motion? It was exact wreck. Executive rec, OK. And so Senator Dima then is, is moving to substitute by the elimination of some $200,000. Yes. The executive rec minus 200,000 that they would come back if, if at a time if needed. And the agency has already said that it needs this 200,000. That's what they stated. Thank you, Mr. Chair. Reverend Wooton questioned on a substitute. Motion I don't have a question. I, I just, uh, Finds it difficult to go against a special funded uh agency. Request when it's been justified of how they, you know, swap out cars and how they change, but I understand, uh, Secretary McDonald's, uh, concern relative to the, the overuse of vehicles, but I think this is an agent to see where they have been wise and prudent and use good judgment in the vehicles that they maintain that they have out there on the road, and the worst thing in the world that can happen is. To have one break down when they're attempting to arrive at a bank to conduct an audit, so I, I have to speak against the substitute motion. Thank you. Thank you. OK, I'm calling for the vote on the substitute motion, Senator just my own favor. I post no knows habit going back to the executive wreck from Representative Beatty. Any discussion on the motion. Not on paper. I opposed. Uh, executive passes. Thank you. Uh, going on now to Miss Hamilton on uh The next section, economic development. Thank you Mr. Chair. Members, we're gonna move to page 202. You'll see the department appropriation summary for the Department of Economic Development or the Economic Development Commission, you'll note they have 24 appropriations. There are 15 appropriations with changes. So hang in there with me, um. Overall For 24, 25, there are 85. Authorized positions, there is a decrease recommended by the executive branch for fiscal year 26 and 27. Of net 6 positions. And overall appropriation levels you'll see at the bottom of the page it's 57 million and fiscal year 24, 25. It'll be a decrease of about 226 million fiscal year 26 and then 242 million 5th 27 funding sources are on page 203. And in the interest of time, Mr. Chair, I'd like to just go over the appropriations of changes. Thank you. On page 205, this is our first appropriation with changes. It's a super projects appropriation. This provides resources to support industries that indicate the intention to invest in this state. They require an investment of over 400 million and something that creates at least 400 new jobs by the project sponsor. This is funded by Derived, I'm sorry, general obligation bonds for economic development is defined in Amendment 82. The request is for 6 million for both years of the biennium and appropriation. It includes a request for a decrease of 194 million to better align their budget with projection. expenditures, which is also the agency's request. You will see that reduction on page 205. It goes from 200 million to about 6 million for both fiscal years 26 and 27. Second appropriation with changes is on page 206 and 207. This is their state operations. It provides for their personal services and operating expenses of the agency. There are 3 functional groups within this appropriation admin and finance global business and marketing and communications, it's 100% general revenue funded. They're requesting to continue appropriation of about 13.4 million in General revenue funding in the amount of 12.6 million for both years of the biennium executive recommendation allows for that as well as the reclassification of 8 positions and the discontinuation of two positions on page 207, you'll see the net increases. There's a decrease in positions from the authorized 25, it goes from 60 to 58. And you'll see That the appropriation level doesn't change very much. There is a slight decrease, goes from 13.4 million and 25 to 2 to 13.4 million in 26 and 13.3 million and 27. Next appropriation with changes we're gonna move to page 213. This is the rule economic development initiative. This is a fairly new appropriation. Cash and treasury, it was established by Act 10 of 2023 and it was passed as a companion bill of Act 746. It was established to provide funds to planning and development districts for distribution projects in rural areas to further rural economic development and revitalization funding for the appropriation, as you can see, has not been identified. They're asking that this appropriation be discontinued for both years of the biennium, which is the executive recommendation. So on page 215. You'll see is authorized to 8.8 million, but going forward in the fiscal years 26 and 27, there's no appropriation requested. Moving on to page 2. 13. Hold on. page to 12. This is a fairly new appropriation as a cash and state treasury appropriation. This is the spaceport feasibility study that was mentioned before that was established by Act 359. The feasibility study was to include a potential mark at the organization and technological requirements and financial and economic analysis for the feasibility of establishing a spaceport. There was no appropriation identified, so the agencies requesting and the executive recommendations also to discontinue this appropriation for both years of the biennium, and you'll note on page 213. There was $950,000 authorized, but it is not being requested for fiscal years 26 and 27. Next appropriation which changes is on pages 216 and 217. This is for the payroll rebate. This was authorized as a capital improvement appropriation and the purpose was to allow financial incentives to companies that locate a new facility or expand an existing facility in the state. Funding was derived from special revenue as composed of transfers from GR I'm sorry, general revenue for financial incentive plans. The request includes 300, I'm sorry, $337.5 million in grants and aid. And you'll note that on the next page on 217, and this is so they can establish the appropriation and to continue the operation of the payroll rebate program. This was an item that was approved by the ALC peer subcommittee at the October 15th meeting about two weeks ago. The executive recommendation is for the agency's request, so you'll notice that there's nothing authorized for 2425, but the 37.5 million is being requested in fiscal years 26 and 27. This is a similar situation on page 218, another appropriation with changes. This is for the recycle tax credit also funded by the Economic Development incentive and this purpose is to provide recycling tax credits agency and executive recommendation is for appropriation amount of 42 million for both years of the biennium. This is also an item that was approved during the October 15th peer subcommittee that was approved by council. You'll note that there's no appropriation authorized for 4 and 5, but there is 42 million appropriated for 26 and 27. Next appropriation with changes is on pages 320, I'm sorry, 220 and 221. This is their new markets performance program. The program allows business entities in the state to earn credits against their state premium tax liability. And the funding is derived from a 0.5% fee on qualified equity investment or long-term debt security requested by any qualified entity, the requested appropriation amount is 142,000 for both years of the biennium and it includes a request for a decrease. Of 733,000 refund reimbursements line items to align their appropriation with their anticipated funding. You'll note on page 221. That the refund reimbursement line item goes from authorized of 875,000 to a decrease in 26 and 27 recommended by the executive to 42,000 for each fiscal year. Next appropriation with changes. On pages 222 and 23. This is our operations. For the rural Services Division. They provide rural services, grants and information sharing and educational opportunities. And they do this through their annual rural development conference. It's 100% general revenue funded, provides for personal services and operating expenses. Agency is requesting and the executive is recommending about 1.6 million in appropriation and general revenue funding of about 1 million for both fiscal years. The request includes a reallocation of 100,000 from the rural fire protection grants line item to their grants and aid line item to align their appropriation with anticipated expenditures and you'll see that on page 223, the Grants and aid line item goes from 400,000 authorized in 25 to 500,00026. 27 And the rural fire protection grants line item at the bottom of the page, decreases from a million authorized in 25 to 900,000 authorized in 26 and 27. Moving to page 227. You'll see there's seed capital investment, cash and treasury appropriation. This is funded by loans. To businesses that have a maximum amount of 500,000 for any one project. As businesses repay the loans, ADC deposits or repayments into a cash fund. They're requesting appropriation of 1 million for both years of the biennium. That request includes a decrease of 500,000 in the investment line item again to align their appropriation with anticipated expenditures, which is also the executive recommendation. So on page 227, you'll see that decrease of authorized appropriation from about 1.5 million. To about 1 million. In fiscal years 26 and 27. Next appropriation with pages, I'm sorry, with changes we're gonna move to page 233. This is another cash and treasury appropriations for energy efficiency. This is for the division of Science and Technology. They contract with the division of Environmental Quality. Energy Office. To develop a plan and execute. The energy efficiency program workshops and our conferences. The funding that they receive is provided by a transfer from DEQ. Energy office. When needed and any interest that they accrue in the process. They're asking to continue. Their level of appropriation. But discontinue the appropriation for both years of the biennium. This is a 100%. I'm sorry Yes, 100% unfunded appropriation, they're requesting that it not be. Continued for the 25, 27. Um Oh, he's gone to representative Wootton's Point, they had only received a little bit of interest distribution, they only received about 654,000 in funding, so they didn't have sufficient to fund this appropriation. The executive recommendation is to discontinue the appropriation for both years. So that 100,000 in uh authorized in 25 is not continued in the fiscal year 26 and 27. Uh, next appropriation is. On page 234 and 235. This is another science and technology appropriations, the federal appropriation. Provide statewide industry-driven manufacturing extension network for delivery of technical and management assistance. They're requesting 1.5 million in both fiscal year 206 and 27, that includes $270,000 they'd like to reallocate from their grants and aid line item. I'd like to increase their operating expenses by about 51,000 and their field services line item. By 223,000, the executive recommendation does allow for this request, and you'll note those pages on page 235. So operating expenses for the 25 authorized goes from 139,000 to about 190,000 in both 26 and 27. The grants and aid line item goes from 275,000 down to zero for both 6 and 7. And then the field services appropriation goes from 376,025 to 600,000 in both fiscal year 6, 26 and 27. Expropriation with changes is on page 236 and 237. This is their acceleration fund. They use it to provide support and assistance for the accelerated growth of knowledge-based high tech jobs. That go through funding for the state's initiatives and programs their programs are all defined in statute what they fund with us. And their funding consists of funds that are provided by law and grants by federal government agencies. They're requesting appropriation of 5 million both years of the biennium would include the following changes, decrease of $95 million in grants and aid again to align their appropriation with their anticipated expenditures and you'll see the changes on page 237. They're authorized amount in their grants and aid line item goes from $100 million to about 5 million. For both years of the upcoming biennial. Next appropriation again, science and technology division. It's a cash and treasury appropriation. This came from the uh STEM education initiative from BB's administration. funding came from interest income. They're asking that this appropriation be discontinued for both years of the biennium, so you'll see on page 239 that the authorized appropriation amount of 40,000 goes down to 0 for the upcoming biennial. Moving at page 240, this is another cash and treasury appropriation. This is their fish and wildlife conservation program. This is run by the division of Rural Services. They provide wildlife conservation issues, hunter education, training, fishing and education, training, boating education, etc. Funding is from a transfer from the Arkansas Game and Fish Commission. The commission acts as the dispersing agent to communities to disperse all of these grants and with the exception of Capital Oley, they'd like continuing level of their 25 authorized appropriation. Along with their requests, they are also asking for restoration of the 50,000 capital outlay to support the program operations. The executive rack allows for the agency's request and you'll see on page 241. At the appropriation level even with all of the changes does not change. Next appropriation changes is also a cash and treasury but by the rural Services Division, and this is for their annual conference and one day seminars for their local governments. Their funding is from cash revenues and there would like to continue their appropriation of 150,000 for both years of the biennium. They are just requesting an increase in 50,000 for their conference. One item and you'll see that on page 243 authorizes 100,000 for 5. And there for fiscal years 26 and 27, it increases to 150,000. Next appropriation which changes is on page 248 and 249. This is their law enforcement grants also run by the division of Rural Services as a cash and treasury appropriation. This provides grants to law enforcement agencies and associations for rural communities with populations of less than 3000. The revenues they receive are derived from the rural development set aside. They're asking to discontinue the appropriation for both years of the biennium, due to lack of funding? On page 249, you'll see that the authorized level of appropriation for fiscal year 25 was 5 million. They're asking it to go down to 0 for both fiscal years 26 and 27. Last appropriation with changes is on pages 250 and 251. This is their EPS score or their established program to stimulate competitive research. Appropriation is a federal appropriation. It provides support for sustainable improvements to a jurisdiction's academic research infrastructure they're requesting their appropriation of 16 million for 26 only, so you're not gonna see any appropriation requested for fiscal year 27. They're also asking to discontinue 3 positions. You'll see the changes on page 251. The appropriate levels stay pretty much flat at 16. million with the three positions for 26. But nothing for 27. And at the request of the chair you asked us to provide the amount of general revenue that was recouped from this agency. There was about 1.5 million recovered from the economic development commission at the close of fiscal year 2024. That concludes my presentations, Mr. Chair. Thank you, Ms. Hamilton, uh members got full board here and I'll just remind you got a. Good ways to go, uh, so please be succinct when you're Questioning, uh, senator. Gilmore, you're recognized. Thank you, Mr. Chair. So two things. First, I just want to circle back on the conversation about fleets, um, Mr. Secretary, thank you for what you're doing, looking at that. I think it's very important. I know back during the transformation discussions, uh, in what 17 and 18 that there was a task force and part of that discussion, uh, centered around fleet management and how we're, uh, we're doing that or, or frankly not doing a very good job of that in state government in general, so I think, um, I, I hope that other agencies listening take that. discussion as an admonishment regardless of where income comes from, whether it's, you know, special revenue or general revenue or whatever, I think our goal is to be more efficient and make sure that we're utilizing, um, all resources very wisely. Um, so I look forward to seeing what, what the department has on that. Um, I am curious though on page 240, speaking about the fish and wildlife conservation program, um, how, how did that end up at rural services? I'm just curious of how that's been administered and why? Hi, good morning. Clint O'Neill, executive director, AEDC Senator Gilmore, I'll, I'll take a guess at that, that, uh, ADC is a grantmaking organization and it got parked in our agency so that we could work with. rural communities in collaboration with Game and Fish, but, um, I, I have several colleagues here, including, uh, Becca Caldwell, director of rural Services for further details if, uh, if that would be helpful. Well, and again, I don't know that I'm against it, and I think it's probably doing very good things. I've just, uh, I, I know that the Arkansas Game of fish also seems to be a granting entity as well. So I just didn't know why it would be, um, maybe siloed, uh, in that regard. But if there's a good reason, I don't know. Maybe there's, maybe it's a good reason. is this something on budget we're gonna How old or is that something I'm, I'm just asking a question for now. I may flag it, Mr. Chair, that'd be fine. Thank you. You, Good morning. Thank you for the question. This is Becca. I'm the director, Becca Caldwell, director of rural Services. Um, this transfer happened before I was the director, but it's my understanding that at the time game and fish should not have the, um, employees to staff this and manage this program. And so it was transferred to us and we have managed it ever since. OK, so what do they have input into that or is it just simply a transfer and y'all handle all of the other aspects. We pretty much administer the grant program, but they are in charge of the main review. We interview with them and then it goes to the rural Development Commission, then it goes to the governor's office, and then the Legislative council is the last one to see and approve. OK, that makes a lot of sense. Uh, thanks for that explanation. Uh, so Mr. Chair, yeah, I do want to flag this if you don't mind. And, and again, nothing necessarily against the agency, uh, rural services or what they were doing. I just, uh, uh, seems like a convoluted process if you ask me, but again, I don't think that's anybody's fault, but I would like to flag it. Thank you. Go, got it flagged and gives a chance to look at it and see what we wanna do, uh, in Kavanaugh, you reckon that. Uh, thank you, Mr. Chair. I'm over here to the right. Um, my first question is going to be on 205 and 209. And on, uh, sorry, wrong, 207 and 209. And on 207, it's your state operations. And when I'm asking about is your industry training program, um, you're asking for an appropriation of 1.7 million, your spend was $137,000 your high spend was in 14 and 15 and that was one. 4 million. So I guess I'm asking. What does this program do and why do you need to continue that appropriation if you're not spending that. Thank you for the question, Representative. So the, uh, BITP the industry training program, is used as an incentive program for training grants for new and expanding companies. We use this program in collaboration with uh Workforce Connections in the Office of Skills Development, so sometimes, um, there's more money to be found on a larger project to pull in training grants from OSD and then sometimes we use this program. I, I would say in terms of the discrepancy, the 1.7 million, uh, some of that, uh, a good portion of that is allocated so we have it in a proposal, uh, typically when we work with a company that's considering a recruitment project or an expansion in Arkansas, we'll do a 90-day proposal and put uh training funds in there, so, um, all of that that is not freed up to use, but it's, uh, you know, flexible and that that's why there's a bit of a discrepancy there. OK, so when someone applies, you kind of use this fund as an incentive to kind of Entice them to try to come here, but if they don't use it, it's just underused appropriation. That's correct. OK. And on 209, um, are we expecting that much additional funding for this? I mean, we're going from federal funds up to $21.5 million and when you get into 25 and 26, you're saying that you're going to get federal funds of $103.5 million. If you don't mind, I'll, I'll ask the expert in that area to, to join us, uh. Gene Noble leads our grants division because everything looks like we're getting more and more money from the federal dollars, but I don't see that hitting the state. So that's why I'm asking these questions. Thank you. Gene Noble, director of the grants division, our primary responsibility is the administration of the Community Development Block grant for the state, CDBG. That would be a similar issue of, um, prior year and expended funds, balances that are either, um, Both, and it, and obligated or obligated to projects, just unexpended. That's our ability to dip back into prior year funds, um, so we, you're more than double, so you've spent in grants and aids, $21.1 million. You are authorized in that particular area to be 48.2 million. Um, so you're well over double what your actual spend was. But also you show your fund balance. Your actual funding that you're projecting from the federal government to go from the actual 21.5 that we got. To 1.35, 103,599,000. So my question is, are we really expecting this type of funds from the federal government. Because it's increased even in budget, you had said that you had projected 98.7 million from the feds, and you only got 21.5. So my question is, are we really expecting to get 103.5 million from the Feds. We do have a large amount of available and expended funding and some of that is obligated and some of it is not, um. It's, it's not an expectation that there will be an increase in What makes you have that expectation and I'm not trying to be rude, but everybody comes up here and says, we're expecting money from the feds or we're expecting money from this. What makes you think that you're going to get funding that goes from $21.5 million to $13 million. It's not an expectation of future funding. It's, it's the ability to have available ma'am, this is your revenue source. I'm not talking about your appropriation amount. I'm looking at your funding. Sources. Your funding sources say that you're inspecting in 25, 26, 103.5 million from the federal government. You could currently go right, but she says that. It's, it's not a future revenue expectation. Like I said, it's, it's the, um, current funding that we have available. Well, if you, if you have the current funding available, then why is it not showed as funding available. You're showing in 2324, you got in from the federal government 21.5 mL. You had excess funding of only $5 million. So that tells me you might have had altogether $30 million OK? But you're over here saying that the feds are going to give you 103.5 mL. Yes, ma'am, on that first column on the 23, 24, those are actual numbers. So that 21.5 million is what was actually spent of federal money, um, and we've budgeted on that 2nd column under the fiscal year 25, the current budget of 98 million. And what's showing available in the federal system for drawdown today is approximately 96 million. So those funds are available. How come we didn't spend them? Some many Much of it is obligated to water or wastewater infrastructure projects, economic development projects, um, that are traditionally slower to start in their construction period, so a good amount of that is, is obligated balance, um. Others, it's just, um, Turn the obligated or turn back funding or, um, we, we also are expecting some, some large, um, grants in the future. So we, we do have that ability to. To draw funds from previous unexpend for staff, this is a question, Kevin, when we're looking at the federal. Funding source. And they're saying that they spent 21.5 million, but they're saying they have like what, 96 million available for so how do we look at this budget and know what they really have to spend. Because a lot of time this projected revenue is what they think's gonna happen. How do we know that that is actual spend available to them. Yes, go ahead. Thank you, Mr. Chairman. Um, you're, you're absolutely right. When you're looking at the funding on page 209 at the bottom, you can see the federal revenue they received is 21.5 million. And then they ended up with a balance of 5 million unexpended. I think where we're getting into some of the confusion is in the budgeted year what they may or may not have received this year and the balance is they say that they're going to carry forward into 26. They're showing that they were anticipating receiving 98.9% federal revenue. I don't know if that's, uh, what the maximum they might, they, they can better answer if that's what they thought they were going to actually get or, or if it's a, if it's a an amount to give them additional Appropriation Authority in case they do get it. It OK, so they're saying they actually have it available in federal dollars now for spend. So I guess my question is how do we, when we're looking at the budget, know that that's actual money that's available versus. Anticipated money available, but they're saying they actually have this money. How do we know that? The, the only way to know the, the only historical data is the last completed fiscal year. And that's 24, that's the first call and that column's really good. That shows you money that actually came in and their actual ending balance, the 25 is a budgeted, so that is. That that that's changing as we speak and so that's where some of this confusion probably is right there. OK. All right. Clear as mud. Thank you. Bye. OK, thank you, Representative, uh, Representative. Barry, you're recognized. Thank you, Senator Gilmore. So, uh, if I may draw your attention, uh, please, to, uh, page 249, uh, the rural Services law enforcement grants, uh, Anytime I see a, uh, a change in appropriation or funding for law enforcement. It, it, it brings me, uh, a great pause and, and when, especially when our number one priority of government is the safety and security of the citizens, uh, of this state. So can you walk me through why, why are we getting rid of the appropriation. And I will say that, uh, crime is directly impacts economic development and I think it's an economic development issue that crime in our communities that we need to address or any help that we possibly can get. So can you walk me through the reasoning behind getting rid of that appropriation, please. Yes, sir. Thank you for the question. I can just, um, my comment is on a, on a high level when we looked at the comprehensive review of this budget and all of the authorized um spending authority. It was to just reduce any unfunded or excess appropriation. And so it's certainly not, uh, wasn't a lack of support. It was just there was no funding tied to that appropriation, so we just reduced it. So would you agree with me that, uh, uh, crime and our rural communities has an impact on the economic development in those areas. Yes, sir. I'd say rural and urban, uh, has a direct impact on economic development. OK, thank you. Thank you, Mr. Chair. You're welcome. Uh, so members, I just want to point out it is uh almost 11:30 and we have special language at 1:30, so I'm gonna try to get us out of here, uh, relatively quickly. So I'm going to ask that we, uh, be concise in our, in our comments and our questions, and we're going to try to move through this list as quickly as we can. So Representative Collins, coming to you. Well, actually it was on the same topic, so, um, if you could just quickly tell me what is the, uh, the status of that rural development set aside, you know, so does it fund something else? Does it exist? What I mean, and I'm talking about the law enforcement grants rural law enforcement grants. Yes, sir, on that particular program, we've, we've never received funding, so, um. It's It's just eliminating and unfunded appropriation. Nothing to add, just that since I've been the director, we've never seen funding, um, appropriated for this grant program, we wouldn't be in an opposition to funding it or, um, managing it. We just haven't had any funding tied to it to manage any type of grant program. OK, so I guess what I'm trying to get at though is unlike some things where we can see where it's funded general revenues, but I don't know where the set aside is funded and where is it in the budget and You're saying it's never had a balance, but this is all that it would serve. So we kind of have like a rural set aside here and that then funds these grants to different buckets, but clarify your question, Representative, you, you, you're talking about the law enforcement grants, is that correct? No, sir, um, there, there was no funding ever tied to that. Um, I believe that In a previous biennium that there was a discussion maybe of the um Lemon law was Attorney general a transfer from the Attorney general's office, but those funds were never received. So, uh, and I'm sorry to belabor the point, but where is the rural development set aside. It's not in this budget. My apologies, I thought you were speaking to the law enforcement grant. I am, but it says that funding comes from revenues derived from the rural development set aside. What page are you on? 248. That, that would, that's just a, a mistake. Oh So where does funding come from then? There, there is no funding. There was no funding, um, provided. I think the substantive legislation at one point. The discussion was that it would be from the lemon law fees that would be transferred from the Attorney General's office, but that did not happen. OK. So it could come from sources, general revenue or gifts or maybe some other things, but it has not ever come in rural development set aside is not part of it. This is a cash fund. Yes, sir. Thank you. All right. Thank you, Representative, uh, Senator Irving, you're recognized. Yeah, I, my questions are on the same, I have to, but. Is there staff, is there a rural development set aside somewhere. That exists No, ma'am. I have, I have a list of all the satisfy, uh, the set asides that we do in peer and you, you'll find that's not one of them. That may have been, uh, a thought to maybe try to get a rainy day release or set aside release for this program, but that was there was nothing specifically set aside because there, as you know, there are some set asides that are discretionary and then the thought may have been they were going to try to get a release from one of those discretionary set asides, but that did not happen. OK, so, OK, so again, probably important not to list that because that was confusing to me as well as what, where is the rural development set aside? What's the balance of the rural development set aside if you're gonna name it in your, in your budget book, then show us the information, what The balance is in it, what it's being utilized for. Those are appropriate questions. And so that's misleading, but number 2 is when you eliminate, and I understand, I, I'm not sure you didn't identify if these law enforcement grants were established by statute or this program was established by statute or just by appropriation bill, but you're eliminating it in the rural Arkansas Economic Development Initiative, which was passed by Representative McClure in 2023. by legislation that's on page 214. And so my question to you is economic development, is it just Urban areas that matter in the state of Arkansas for economic development, because when we do this and we don't put rule in the titles of things. It shows a lack of priority. In my opinion. So where are you accommodating for specific rural economic development. Thank you for the question, Senator Ervin. I would say rural economic development is a absolute top priority to our team at AEDC. Everything that we do, the initiatives we create are intended to be statewide initiatives, uh, we've focused with the priority area on entrepreneurship on some statewide programs, uh, 75 strong and ari that are intended to be statewide programs with a focus on rural. Economic development, our site development program intended to, to strengthen, um, product, uh, all around the state, including, uh, rural communities, uh, really proud of the, the work that we've done with some recent announcement projects and Corning and Pocahontas and Walnut Ridge and Desark and I feel like we're really on a winning streak in rural Arkansas and that will continue because of the focus that we put, uh, with our resources, with our staff, with our time, the work that our community development. that our rural development team does and, and these new initiatives are certainly focused on rural Arkansas. So, so my challenge to you, and I guess that's housed or umbrellaed under Arkansas Economic Development. Is that correct? All of these initiatives? Yes, ma'am that's where the funding from all those projects came from not a specific set aside. So I guess my challenge to you is, you know, making sure that you're saying that in a title, because when you eliminate these appropriations, right? That it appears that it's not a priority. And, and we want to, obviously, we, a lot of us represent rural Arkansas. So, I just, that's my challenge, I think, just be more mindful. about how we're saying things and how we're approaching an advertising the good work that we are doing, but name it in the title. I think it's really, really critical that these things be named and then my second question is on page 200. You have in here a lot of different reports and it looks like some of these, most of them were, uh, created by legislation and they're probably all very good reports, and I, I appreciate that. Is there, uh, is there a way that I know that we're getting now, um, I, I believe annual reports through Arkansas Legislative Council for, for secretaries and departments. Is there a way that we can, um, be a little bit more efficient with these reports and just provide it at that annual report versus whenever maybe these statutes dictate upon these and that be an annual report. I would just I think it would be less work for the agency, and I think it would actually be more meaningful for the legislature if we could get that now in more of a, an annual report by the secretaries at our legislative council meeting. And making sure I understand your point, like a summary of all these reports. To you Yes, and then, and then check to see in that legislation, how those are written or what is mandated by the legislature as to how we could probably streamline that maybe. Um, I just think streamlining it because they were probably created at different points of time, like this one of Act 1282 of 2001. I really don't know what that is or what that means, but, you know, let's go back and let's look at that. statue, those statutes that created those reporting mechanisms, and let's see if there's a way we can streamline that. In my opinion, I think it would just be more efficient and effective. We'd be happy to do that. Thank you. Thank you, Senator, uh, Senator Dismay, you're recognized. OK, give me. Now, don't hit that button again. All right, uh, just real quick on the new markets performance program, is that kind of Going out and I've noticed that there's a substantial decrease in the appropriation authority there. Is it been useful? Do we have any measurements on any of the projects that we funded through that. Senator, that, that's correct. It's being reduced to the available funding. OK. All right, is there something we should look at when we go into session, or do you feel like that's a. The program worth continuing. I don't believe this particular program is worth continuing. And then so we probably need to take a look at the laws on the books then too that authorizes it, right, and then just real quick, going back to the uh fish and wildlife program. That is purely a grant program, is that the way I understood that? Yes, sir. My only question then is, is the 50,000 for capital outlay. If it's a grant program and we're just a pass through. What do we need the capital outlay to do. Thank you, Senator. That 50,000 we are paid 1.5% of an administrative fee, and that's in the event we could um utilize those funds, those administrative funds. That's we have reduced the other capital outlay um lay, um, commitment items within the act. There was 100,000 that are operating act. And so that was reduced and this is, this is what we have remaining is 50,000. So it was 150 between now and when we get into session and. Maybe see why Gam of fish can't administer this program. There's no sense in passing along a 1.5% fee. There's no sense in having capital outlay and all these other things that go on. It doesn't seem very efficient to me if game and Fish has granting authority, which they do, I mean they give grants on a regular basis, so if y'all could look at that, we may be able to strike that away and and have a much more efficient process through game and fish. Thank you, thank you. All right. Thank you, Senator. Again, um, I just want to remind members that, you know, we do have special language at at one. I know people probably want to have lunch before then, uh, so we're gonna move, uh, as expeditiously as we can, so Representative Kavanaugh. coming to you. Thank you, Mr. Chair. Uh, my question is gonna be on 251. It's the E score, it looks like, uh, science and technology, the federal funds. So I noticed that we're asking to keep it in 25, 26, but going away in 26, 27. I'm assuming that's a program that the funds are running out on. OK. Yes ma'am. That federal grant program is ending. OK, and then, We, how much do you have left of it? Cause you're asking for a 14.2 million. Um, appropriation in grants and aids. Well, that, that available will get blocked down to approximately 5 million 4 4.5. It won't be available. It'll be blocked during the, um, budgeting process. So you're not asking to reduce it now, you're gonna ask to reduce it in session? No, no, ma'am, just what's available to to spend in AI. It wasn't requested to reduce, um to 4.5, but that's, that's the balance of the grant. OK, I'm gonna have a motion at the proper time. OK. Thank you, Representative, um, members, we have 2 more in the queue. I'm gonna go to these two and then we are going to finish up on this section of the agenda, but then we're going to jump down to, uh, the inspector General, um, and, and take that up quickly before we adjourn, so, uh, Representative McClure coming to you. You're recognized. Yes, uh, thank you, Mr. Chair. Uh, back on page 214 15. Since we're not appropriating the money for designated rural economic development. And we have stated that it is a high priority. Can you tell us what percentage of your assistants and incentives will be directed to the 71 county or 71% of our counties that showed a decline in the 2020 census. Yes, sir. Happy to get that information. I, I do not have that available in front of me, OK, because that tho those 50 something counties represent about 1/3 of our population, but however, when we look over a period of time because they don't qualify under our current layouts as we've discussed many times before, they're still suffering. I know we got a good project Desarc. We've done great in Mississippi County, but we're still seeing a decline and, uh, I'm just kind of wondering where the focused effort is other than just talking about it so. Representative McClure, I would, I know we've had conversations about the importance of rural economic development, and I would tell you that, um, some of the new programs we've intentionally made sure that They had a rural focus on it like the arise program, the 75 strong program we want to make sure that we're doing everything we can from an economic development perspective as Mr. O'Neill said, I think we've had a successful year in, in projects all over the state. We're going to continue that. Um, as you know, we can't have super projects everywhere, um, uh, and, and we'll do everything we can to promote our rural communities and I think you're, you're seeing demographics uh in the United States, millennials moving back to. Um, small town America, rural America, so I think. There's there's future opportunities for us, uh, as, as the state of Arkansas, so we will continue to uh make sure it's a priority. OK, thank you, Representative, um. See no other questions in the queue, uh. Representative Kavanaugh coming to you for a motion. Let's hear your motion. Thank you, Mr. Chair. My motion is going to be accept, uh, Executive rec with the exemption on to continue the rural services law enforcement grant appropriation, and then to reduce the, um, grant and AIDS light item down from the 14.2 million to the 5 million that's going to match their spent available to spend, OK, members, you've heard the motion. Do we have a second? I have a motion. I have a second. Any discussion Seen no discussion, all in favor say aye. Any opposed? Eyes have it. All right, members with that, we're going to move, thank y'all, uh, Mr. Secretary, for being here. And, and you'll come back tomorrow, um, for the remainder of your presentation. We will now move to The inspector General's department. All right, Mrs. Walls, you may, uh, Announce yourself for the record and then I'll ask the others to and recognize himself. Thank you, Mr. Chair. My name is Lila Walls for the Bureau of Legislative Research. My name is Cynthia Bearden. I'm the chief financial officer for the department. My name's Ricky Quantaba. I'm the, uh, director of the Office of Internal audit. Thank you. You may proceed. All right, thank you, Mr. Chair. Um, we're going to be starting on pages 404 and 405 in manual number 3, versus for the Department of Inspector General, their appropriation summaries listed on page 405. The department was created by Act 910 of 2019 and combines under a single umbrella, the Office of Medicaid Inspector General Arkansas Fair Housing Commission in the state's internal audit section Act 586 of 2021 established the Independent Tax Appeals Commission within the Department of Inspector General to resolve disputes between the Department of Finance and Administration and taxpayers. The department has authorized appropriations of $13.7 million with 69 positions and they're funded primarily through state central services, general revenues, and federal revenues, and I have 10 total appropriations. They're requesting changes in appropriation levels to 6 of their appropriation and continuation of current authorized levels in 4 for a total request of $13.2 million which is a decrease of about $425,000 or about 3%. And we're gonna focus on the appropriations that have changes. So if you'll turn to pages 406 and 407 in your manual, we will begin with the Office of Medicaid Inspector General. Now, the Office of Medicaid Inspector General has 5 appropriations total. We're gonna focus on the two that have changes, OK, so the first one is gonna be on page 407. This is their cash operations appropriation, and they're currently authorized a little over, or almost $202,000 and they're funded with an interagency transfer from the Department of Human Services Division. of medical services. They're requesting the transfer of one position from the Shared Services appropriation to this one along with associated salary and matching, which is an increase of $144,000 in both fiscal years to 346,000 and the executive recommendation provides for the agency's request. The next one that we're going to do is going to be the state operations appropriation and that appropriation summary is on page 409. Um, it is currently authorized about $1.1 million and it's funded with general revenues through. Miscellaneous agencies fund. And they're requesting an increase of approximately $93,000 in salary and match for personnel reclassifications for a total increase to $1.15 million. The executive provides for the agency's request. The next one that we're going to talk about is the, for the Arkansas Fair Housing Commission, they actually have two appropriations. We're only going to talk about the education trust fund appropriation that they have and they're on pages 4, 18, and 419. Um, in this particular appropriation, they're currently authorized about $137,000 and they're funded from federal revenues and cash funds generated by continuing education and training fees, contributions and administrative and civil penalties. The department is requesting a decrease to $95,000 which is a decrease of $42,000 total, and they're requesting approximately $32,000 be taken from their operating expenses line item and $10,000 be taken from conference fees and travel, and both of those items have. and decreased to better align with anticipated expenditures and the executive recommendation provides for the agency's request. The next one that we're gonna talk about is on pages 420 and 421. This is for the independent Tax Appeals Commission. Um, and they are currently authorized in appropriation of about $2.2 million and they're funded through state central services. The department is requesting approximately $1.6 million which is a decrease of about 653,000 with the following line item changes. They want a decrease of $50,000 in operating expenses, $105,000 in conference fees and travel and a decrease in the professional fees lineup item of $500,000 which will take that line item down to 0 and all of these decreases. are being made to align appropriation with anticipated expenditures and the executive recommendation provides for the agency's request. The next one that we're going to talk about is on pages 422 and 423. Um, and this is the internal audit section's operations appropriation. They are authorized approximately $1.2 million and they are funded through state central services, and the department is requesting increases to approximately $1.4 million with the following changes. They're asking for $142,500 to be added to their operating expenses line item in both years, uh, for their portion of shared services expenses and for additional facility and data processing equipment rental expenses, and they're asking for a 7000. 5 $7500 increase for training in conferences and travel expenses so that they can give training to the 9 internal auditors that they have, and the executive recommendation provides for the agency's request. And the final appropriation that we're going to talk about is there their shared services appropriation, which provides for the operations of the shared services of the department, it is currently authorized about $1.5 million and is funded with transfers from the other four sections of the department. The department is requesting a decrease to $1.35 million because they, the pers the position that they requested in the Office of Medicaid Inspector General is the very beginning is being transferred from their shared services appropriation along with the associated salary and match for that position. And the executive recommendation provides for these requests, and Mr. Chair, this concludes my presentation for this department. I'll be happy to answer any questions. Thank you, uh, seeing no members in the queue, I do have a motion for executive rec. I have a second. Any discussion? Thank you, Inspector General, for being here, uh, but with that, Uh, all in favor, say I. In your post. See none is passed. Thank you. Uh, thank you for again being here, members, we are adjourned, uh, 1:30 will be special language in here. Thank you very much.