Transcript Highlights:

• Today we'd like to request the adoption of revised administrative rules for OMB.
• Today we'd like to request the adoption of revised administrative rules for OMB.
• The proposed rule changes have been approved for adoption by the Director of OMB and the State Personnel
• This information was also made available on the OMB website.
• I serve as General Counsel for HRMS within OMB.

Committee: Joint Administrative Rules Committee

Transcript Highlights:

• Today we'd like to request the adoption of revised administrative rules for OMB.
• Today we'd like to request the adoption of revised administrative rules for OMB.
• The proposed rule changes have been approved for adoption by the Director of OMB and the State Personnel
• This information was also made available on the OMB website.
• I serve as General Counsel for HRMS within OMB.

Summary: The Administrative Rules Committee met on June 11 and first approved the March 12, 2026 minutes by voice vote. It then granted the Board of Medicine an extension of time to implement rules tied to recent legislation, including North Dakota’s participation in the physician assistant licensure compact and a new physician nutrition continuing education requirement. The Board said it was waiting on compact rules and fee information before finalizing its own changes. The committee heard a lengthy presentation from the Office of Management and Budget on broad personnel rule revisions, including salary administration, recruitment, leave, sick leave, funeral leave, service awards, appeals, and shared leave. OMB said the changes modernize HR language and implement recent legislation such as enhanced annual leave for hard-to-fill positions and new hire leave. Members questioned the hard-to-fill leave provisions, but OMB and counsel said those standards come from statute, not the rules. The committee also heard and accepted rule packages from the Lottery, the Board of Examiners for Audiology and Speech-Language Pathology, the State Electrical Board, the Industrial Commission, PERS, and Health and Human Services, with each agency describing mostly technical, clarifying, or statutory-conforming changes and noting the public notice and comment process. The most significant action came during the Gaming Commission rules presentation. After questioning whether the commission had authority to raise the poker tournament buy-in limit from $300 to $1,500, members moved to void Section 99-01.3-09-01 on the ground that the agency lacked statutory authority for that change. The motion passed on a roll call vote. The committee also discussed several gaming-related issues, including online raffles, kiosk use, advertising restrictions, and the broader policy question of whether charities should be allowed to own bars, but took no further formal action on those topics.

Transcript Highlights:

• We'll move to our presentation from OMB, Joe Morissette. Welcome, Joe. Moreset. Welcome, Joel.
• And on the next item then on your agenda is to talk about the OMB revised forecast, which is, Is, of
• And on the next item then on your agenda is to talk about the OMB revised forecast, which is, is to talk
• about the OMB revised forecast, which is, of course, not an official forecast, but it's what we use
• The last page that we tend to go through is a balancing of the cash in our account with OMB to that cost

Committee: Joint Budget Section

Transcript Highlights:

• disbursement of federal financial assistance and other relevant agency activities, while the agency, OMB
• So, were these budgetary cuts solely done through OMB measures, or were some of them also directed via
• From the get-go, the biggest threat from day one was the issuance by OMB of this memo saying, 'Everyone

Committee: House Federal Funding Stabilization Subcommittee

Transcript Highlights:

• So the general concept here was essentially having OMB issue a pass-through grant to the association.
• They've also done the guardianship grants in the past, so it just seemed maybe just to have OMB, and
• association and/or the costs incurred by the counties, you know, they could certainly request that OMB
• If there's unused money, then at the time requested by OMB, they would need to turn back unspent money

Summary: The subcommittee met with a quorum, approved the prior minutes, and focused primarily on property tax statement issues tied to the primary residence credit and the 5% early-payment discount. North Dakota Association of Counties representatives said the current special-session language creates problems because the discount is being applied even when no taxes are ultimately owed, and because the discount is calculated before the PRC funds are actually received. They recommended reverting to the prior law so the discount is applied after the PRC, and noted that all four programmers said they could revert the software to the earlier version if needed. The committee also reviewed a bill draft to remove the legislative tax relief line item from the required contents of the property tax statement. Members agreed the current line item is not especially accurate or useful on the statement, and several members said the committee should go further by adding clearer taxpayer education, such as a pie chart or other supplemental breakdown of where property taxes go. County officials said some counties already provide supplemental charts or explanatory material, but others would need help with printing, mailing, or formatting. To support that idea, staff presented a second bill draft creating a grant program, administered through the Association of Counties with OMB as a pass-through, to reimburse counties for supplemental property tax statement information and related administration. After discussion, the committee voted unanimously to combine the two bill drafts into one recommendation and forward it to the full Tax Reform and Relief Advisory Committee. The subcommittee then voted to adjourn after directing staff to prepare its summary and recommended bill draft for the interim report.

Transcript Highlights:

• Section 6 is OMB as the internship fund for the Department of Commerce.
• Section 6 is OMB as the internship fund for the Department of Commerce to administer Operation Intern
• There will be $30 million in the Development Fund transferred, an OMB transfer from SIF to the Development

Bills: SB2018

Committee: House Appropriations - Education and Environment Division

Summary: The committee took up Senate Bill 2018, the Department of Commerce budget, and walked through the long sheet and a series of proposed changes. Members discussed restoring a vacant workforce FTE that Commerce said it could fill soon, monitoring federal funding delays but reporting no known cuts, and adjusting several one-time items including Operation Intern, the North Dakota Development Fund, the Global Talent Office, and tourism-related funding. The chair also proposed separating tourism marketing and Good Life funding again, rather than combining them, and members raised concerns about ensuring tourism dollars are used only for tourism purposes. A number of program amounts were reviewed or adjusted in discussion, including UAS grants, Vantus/Beyond Visual Line of Sight funding, Grand Sky, Grand Farm autonomous agriculture grants, base enhancement grants, Native American small business grants, regional workforce impact grants, technical skills training grants, and tribal college workforce grants. Commerce officials explained that some grant language would be changed to require competitive RFP processes, and they clarified that the housing opportunity and community property improvement items were handled in other bills or programs. The committee also discussed apprenticeship efforts across state agencies and Commerce’s role in workforce development. The committee reviewed carryover and exemption language for prior appropriations, including federal weatherization and energy funds, and Commerce said three one-time FTE tied to those federal programs should become ongoing because the federal dollars continue over several years. A motion to add $1.5 million for the North Dakota Safety Council failed for lack of a second. The committee then planned to return the next day to continue work on Commerce and take up the CTE budget, including a pending amendment related to CTE’s possible move from the 15th floor of the Capitol.

Transcript Highlights:

• The one thing I do have to ask, so, is like OMB and Joe—he stepped out and then came back, which is good—but
• That doesn't all—I thought we were—we messed around with that, but I know OMB at one point had it where
• Well, no, it was just that OMB didn't recognize the amount unless it was cash available.
• But I know at one time that OMB, if you didn't have it, if it wasn't available, you didn't recognize
• But what I'm questioning is, does OMB recognize that, or how do you handle that if it's not available

Summary: The Legacy Fund Committee received updates from the North Dakota Retirement Investment Office (RIO) on fund performance, liquidity, in-state investments, and internal management. Scott Anderson reported strong returns for the Legacy Fund across multiple time periods, with performance exceeding the policy benchmark and expectations, driven largely by strong equity markets and effective implementation. He also reviewed private market pacing, noting commitments were on plan but that unfunded obligations and distributions were lower than expected, and presented a new liquidity analysis showing the fund had substantial capacity to meet obligations even under stressed market scenarios. The committee also discussed RIO’s internal investment program and cost savings. Anderson explained how internal management of fixed income, equity, and cash overlay strategies has reduced fees and transaction costs, while improving flexibility and portfolio construction. Members asked about staffing needs, and RIO leadership said asset growth has outpaced current staffing, with a request for additional FTEs likely coming to support investment, operations, risk, and legal functions. The committee also reviewed the Legacy Fund’s in-state investment program, including 50 South Capital and infrastructure lending, and heard that one manager’s buildout is progressing more slowly because many opportunities are still early-stage. Adam Odison presented a preliminary estimate of the 2026 Legacy Fund earnings distribution, projecting about $894.8 million under current law, with roughly $237 million to the Highway Fund and $554 million to the Property Tax Relief Fund after the sinking and interest fund allocation. Jody Smith then gave a project update on a new standalone Legacy Fund website required by statute, intended to consolidate performance, holdings, governance, fees, and use-of-funds information for the public, with a planned launch around the October State Investment Board meeting. She also raised a possible future proposal to place the Legacy Earnings Fund back under State Investment Board management so the cash could remain invested longer before being transferred out, though members noted liquidity, accounting, and bank-deposit implications would need further review. Finally, Kelvin Holden of the Bank of North Dakota reviewed the match loan program, explaining how it supports large economic development projects by pairing Bank of North Dakota loans with State Investment Board CDs. He said the program currently has about $272 million outstanding and has supported projects such as Coal Creek Station and the MDU gas line to Gwinner. Members discussed whether the program’s return is appropriate and noted a prior moratorium on new investments so the committee can revisit the policy next session. The committee then elected Senator Klein as chair and Representative Hogan as vice chair, and the meeting ended with members thanking staff and partners for the fund’s progress.

Transcript Highlights:

• need to increase the FTE count to the department, if that's a problem that we have, we can work with OMB
• So page nine, we removed the State Hospital in the expectation that it will be represented in the OMB
• Chairman and committee, so that language is in here, and it's also in OMB, and that's the, used to be
• acknowledgement that there should be a steering committee and some question whether that should be in OMB

Bills: SB2015

Committee: Senate Appropriations - Human Resources Division

Summary: The committee met to review revised long sheets and section-by-section language for a human services/health budget bill, with much of the discussion focused on how to present block grant funding and full-time equivalent (FTE) positions for behavioral health clinics and CCBHCs. Members debated whether to keep FTE counts in the budget at all, ultimately leaning toward removing or zeroing out the FTE references while keeping the dollar authority, and reducing the salaries-and-wages block grant by about $4.75 million. They also discussed public health federal authority, agreeing to remove about $60 million in unused federal spending authority tied to COVID-era funds, and clarified that if federal money later becomes available it could be requested through the Emergency Commission. A major topic was the provider inflation increase. The House version had 2% and 2%, while members debated alternatives and appeared to settle, at least for further work, on 2% in the first year and 1.5% in the second year, with staff asked to recalculate the fiscal impact. The committee also reviewed FMAP changes, noting a revised 2027 FMAP estimate and its effect on general fund and other funds, and discussed whether to adjust public health and other line items accordingly. Several members emphasized that many of these numbers are still tentative and will be refined before final action. The committee also touched on several policy items and capital-related provisions, including behavioral health services, Medicaid expansion, the moratorium on new ICF beds, and a proposed amendment for a medical homes/fourplex-related item that would show a $400,000 legislative investment with repayment from a developer. There was extended discussion of the All True hospital/facility proposal, with some members favoring leaving it in with a smaller initial commitment and others preferring to remove it and revisit later in conference committee. The meeting ended with staff asked to continue updating the bill language and members instructed to review remaining sections before the next meeting; no final votes were taken in the portion provided.

Transcript Highlights:

• that in visiting with Representative Bosch, who's also involved with the overall IT area and also with OMB
• that in visiting with Representative Bosch, who's also involved with the overall IT area and also with OMB
• Representative Hansen asked whether the $3 million would be moved into another budget, either IT or OMB

Bills: SB2003

Committee: House Appropriations - Education and Environment Division

Summary: The committee first reconsidered Senate Bill 2003 in the higher education budget and adopted several changes. It removed $3 million for enterprise resource planning, struck $2 million for a grant program for students who are pregnant or recently gave birth, and then added $3 million back into workforce education and innovative grants, restoring that line to $12 million. Members also discussed a possible purchase of the 19th Avenue building in Fargo for the State School of Science, but the motion was withdrawn for later consideration. Other higher ed items were briefly noted, including tribally controlled community colleges and a state magazine funding line, but no final action was taken on the building proposal during this segment. The committee then moved to Senate Bill 2018, the Commerce budget, and reviewed a long list of funding items. It restored a vacant workforce FTE, increased tourism marketing to $10 million and Find the Good Life to $5 million, raised Operation Intern by $1 million, removed a $100,000 infrastructure study, increased autonomous agriculture grants to $15 million, and set the Regional Workforce Impact Program at $10 million. It also kept or adjusted several other items, including the uncrewed aerial vehicle replacement program, the global talent office, tribally controlled community colleges, Native American small business grants, and technical skills training grants. A major new provision would transfer $50 million total, split between SIF and Bank of North Dakota profits, to the Theodore Roosevelt Library Museum Endowment Fund, matching a private fundraising challenge; members expressed both support and concern, and said they would revisit it later. The committee also discussed language to allow commercialization of Vantis and to permit the Turtle Mountain gaming compact proposal to move forward with required federal approvals, while clarifying that a previously discussed $100,000 study had been removed. Commerce officials said the workforce language was intended to centralize data and strategy, and they noted Operation Intern would need an emergency clause because applications begin in May. No final vote on the Commerce budget was taken in this segment, and the chair said the committee would return later to finish both budgets.

Transcript Highlights:

• But OMB is the managerial agent that directs at the direction of the president.
• OMB directs, the cabinet agencies, so I expect.
• Maybe the comptroller to perform the same function as OMB does in relationship to the President of the

Bills: SB825

Committee: Senate Border Security

Transcript Highlights:

• have a unique opportunity because we are working with the Federal Office of Management and Budget, OMB
• We are working with the Federal Office of Management and Budget, OMB, who have invited us to work with
• And again, we have a unique opportunity for Arkansas to apply to the current OMB for this cost allocation
• And again, we have a unique opportunity for Arkansas to apply to the current OMB for this cost allocation

Committee: All ALC-HOSPITAL, MEDICAID, & DEVELOPMENTAL DISABILITIES STUDY SUBCOMMITTEE

Summary: The committee met to hear consultants Mason Bishop and Cameron Christie discuss Arkansas’s “one door/no wrong door” workforce and social services modernization effort. Bishop argued that the current system is fragmented across multiple agencies, offices, and portals, making it hard for job seekers and employers to access services efficiently. He said the goal is to create a more integrated system that promotes upward mobility, longer labor force attachment, better employer access to talent, greater efficiency, and faster adaptation to changes such as AI and other economic disruptions. Bishop repeatedly pointed to Utah as a model, describing how that state combined workforce and public assistance functions into a single agency, used statewide cost allocation to blend funding streams, and improved customer service and outcomes after reform. He said Arkansas should consider integrating governance, service delivery, and financing, including possible waivers, a statewide cost allocation plan, and a benefits-cliff pilot. He also said Arkansas’s current local workforce board structure creates duplication and weak coordination, and that Launch is a useful tool but not a full service-delivery system. Committee members asked how the proposal would work in practice, including whether TANF could be used to cross-train DHS workers, how federal waivers might be obtained, how local boards would be affected, and how disabled clients would be handled. Bishop said TANF should be treated as part of a workforce strategy, that federal pilot authority for workforce reform nearly passed but did not, and that waivers are now the practical path. He also said Arkansas could either merge functions more fully or at minimum co-locate workforce staff in DHS offices statewide. No votes were taken; the meeting ended with plans to continue the discussion in August, including a focus on case management and whether the state is managing programs or people.

Transcript Highlights:

• changes should be based on input from the Department of Human Services, from Legislative Council, from OMB
• We've been working very closely and collaboratively with OMB, with NDIT, in order to make sure that we
• First of all, Pat, one of my interests early on in this was the procurement process with OMB.
• Our team has really worked on this with OMB and with NDIT, and we had a really good meeting that culminated

Summary: The Rural Health Transformation Committee met to receive an extensive briefing from the Department of Health and Human Services on North Dakota’s federal Rural Health Transformation award. HHS leaders Pat Traynor, Donna Auckland, Jonathan Ollum, and Krista Freming described the $198.9 million award, the tight federal timelines for obligating and liquidating funds, and the need for rapid procurement, CMS approval, and technical assistance. They outlined broad funding priorities including connect tech/data, care closer to home, workforce recruitment and retention, and a “Make North Dakota Healthy Again” prevention initiative focused on chronic disease, movement, nutrition, behavioral health, and community connection. They also emphasized that the program cannot fund new buildings or supplant existing funding, and that sustainability will be a key requirement for all projects. The department previewed likely first-round grant opportunities, including recruitment and retention incentives, technical assistance and equipment grants for rural providers, financial analysis support for rural hospitals, and exploration of a unified electronic health record option. Freming also reviewed four policy bills tied to the award: a presidential fitness test, nutrition continuing medical education, the Physician Assistant Compact, and pharmacist scope-of-practice changes, explaining that these policy actions affect future scoring and funding. HHS said it will work with tribes, local public health, hospitals, medical and pharmacy associations, and other partners, and will use a website, listserv, listening sessions, and committee updates to communicate opportunities. Committee members raised concerns about how the money will reach rural residents, whether newspapers and existing local communication networks will be used, how “rural” and “frontier” will be defined, how faith communities might participate in behavioral health efforts, and how HHS will avoid CMS delays and supplanting issues. HHS responded that the focus will be on where the patient lives and on rural community need, that local public health units and existing structures will be part of outreach, and that technical assistance and template applications will help speed approvals. The committee approved the December 4, 2025 minutes, then recessed into divisions for further work on the appropriations bill and the four policy bills, with the full committee set to reconvene the next morning.

Transcript Highlights:

• We'll move to our presentation from OMB, Joe Morcette. Welcome, Joe. Morcette. Welcome, Joe.
• And on the next item then on your agenda is to talk about the OMB revised forecast, which is, Is, of
• relates specifically to oil, and some of it relates to their other tax types. is to talk about the OMB
• requires that before any agency applies for a grant of $25,000 or more, that they have to report that to OMB
• The next page balances the cash in the account with OMB to the cost center statement.

Committee: Joint Budget Section

Summary: The Budget Section met to approve prior minutes and receive a series of budget, revenue, and program updates from OMB, the Tax Department, DOT, DMR, and DPI. OMB reported that general fund revenues through May were about $76 million below the legislative forecast, driven mainly by individual income tax and sales tax shortfalls, though the biennium is still projected to end with a positive balance. OMB also reviewed oil price and production assumptions, the budget stabilization fund transfer above its cap, Legacy Fund performance, federal grant applications, fiscal irregularities, tobacco settlement proceeds, budget guidelines for agencies, vacancy savings, and the DAPL settlement, noting that most of the settlement funds had been deposited but a small amount of accrued interest would require a future deficiency request. The committee then considered Emergency Commission requests. It approved requests for Public Service Commission abandoned mine lands federal authority, an Attorney General FTE and related funding for criminal investigator work tied to the Office of Guardianship and Conservatorship, and a DPI transfer for bridge software costs. After discussion, the committee also approved DPI’s request for a $500,000 transfer for the food vendor program, despite questions about the program’s savings and cash-flow structure. Later, the Tax Commissioner presented the primary residence credit program, reporting that current biennium costs are expected to exceed the appropriation by about $22 million and explaining how the credit interacts with homestead and disabled veteran credits and the 3% property tax levy cap. The Legacy and Budget Stabilization Fund Advisory Board reported strong returns for both funds, and DOT sought and received approval for two flexible fund highway projects on ND 49 and ND 31. DOT also updated members on Highway 85 construction and said remaining flex fund dollars were essentially fully allocated. DMR reported on the abandoned well plugging and site reclamation fund, noting North Dakota’s relatively small orphan well inventory, current and projected fund balances, rising remediation costs, and a possible need to adjust the fund cap in future sessions. Finally, DPI outlined the new integrated formula gap funding program, explaining that it compensates school districts that cannot reach the assumed 60-mill local contribution because of the 3% levy cap; the first year’s gap funding totaled about $1.8 million, with future costs expected to grow.

Transcript Highlights:

• We'll move to our presentation from OMB, Joe Morcette. Welcome, Joe. Moreset. Welcome, Joel.
• And on the next item then on your agenda is to talk about the OMB revised forecast, which is...
• relates specifically to oil, and some of it relates to their other tax types. is to talk about the OMB
• requires that before any agency applies for a grant of $25,000 or more, that they have to report that to OMB
• The last page that we tend to go through is a balancing of the cash in our account with OMB to that cost

Summary: The Budget Section approved the March 18 minutes and received an OMB update showing the general fund is still ahead of the budgeted starting point, but revenues through May are now about $76 million below the legislative forecast, driven mainly by individual income tax and sales tax shortfalls. OMB also reported the budget stabilization fund is above its cap, meaning a transfer to the general fund is expected, and reviewed oil price/production assumptions, noting continued volatility. Members asked about the income tax netting process, the sales tax decline, oil price discounts/premiums, natural gas taxation, and when the executive branch would present its revenue forecast. The committee then acted on several Emergency Commission requests. It approved, as a group, requests for federal mine reclamation funds for the Public Service Commission, an additional criminal investigator FTE and funding for the Attorney General’s office, and a DPI transfer for bridge software costs. It separately approved DPI request 2164 for $500,000 to support the food vendor program after debate over whether the program’s savings were known and whether the money was simply a pass-through. OMB also reported on federal grants, fiscal irregularities, tobacco settlement proceeds, budget guidelines for agencies, FTE pool usage, vacancy savings, and the DAPL settlement, noting the settlement funds had been deposited and that a deficiency appropriation may be needed later to cover remaining accrued interest. Tax Commissioner Brian Kroshus presented on the primary residence credit program, saying participation has grown sharply and that the current biennium will likely need about $431 million, roughly $22 million above the appropriation. He explained how the credit interacts with homestead and disabled veteran benefits, how the 3% property tax cap works, and why county valuations and mill rates vary. The committee also received a Legacy Fund/Budget Stabilization Fund report showing strong returns, and DOT Director Ron Henke received approval for two Flex Fund highway projects on ND 49 and ND 31. Henke also explained remaining Highway 85 funding and said the department is exploring uses for leftover state dollars. Finally, the Department of Mineral Resources reported on abandoned well plugging and site restoration, noting North Dakota remains in relatively strong shape compared with other states, and DPI began a presentation on gap funding tied to the 3% levy cap, reporting 24 districts received $1.8 million in the first year and projecting higher future needs.

Transcript Highlights:

• Vote and OMB? Absolutely, Senator Warner.
• Well, I ask this because both the OMB and Treasury seem to have a concerted effort to involve themselves
• think that's an important and appropriate focus and goal that we could accomplish. your regulations to OMB
• But submitting rules for review by the OMB would be contrary to the previous practice of the Federal
• So I would urge you to think hard about whether you're going to submit regulations to Treasury or to OMB

Committee: Senate Banking, Housing, and Urban Affairs Committee

Keywords: legislation, housing affordability, financial regulation, public testimony, accountability, oversight

Summary: The meeting involved significant discussions around key legislative proposals, primarily focusing on various bills such as HB2 and SB5. The committee examined the implications of these bills on issues like housing affordability and financial regulation. Notable members engaged in debates, providing differing perspectives on the potential economic impacts of the proposed bills. The meeting witnessed public testimony, which included a call for accountability in government actions and oversight of current financial policies. Members echoed concerns about following through on commitments to address critical issues affecting everyday Americans.

Transcript Highlights:

• We've got some presentations today by ITD and OMB.
• So I don't know who's leading off, whether it's OMB or a... Couple months.
• From what you heard, do you think we could fund OMB without doing the university system?
• Or do you... ...fund OMB without doing the university system?
• You see here's two agencies, Emergency Services and OMB, up into the right is a good thing.

Summary: The committee received several informational reports from NDIT and DPI. Justin Data reviewed the quarterly major IT project portfolio, noting the portfolio was slightly under budget and behind schedule overall, with three red schedule items: Bed Management System and Vital Records were essentially complete and being closed out, and the Roadway Capital Planning Project was delayed by vendor bug fixes after testing. He also summarized recent project startups and closeouts, including the Victim Notification System, Medicaid data exchange, Highway Patrol’s motor carrier permit system, and several completed HHS and RIMS projects. Members asked for follow-up on ADA compliance work, the public-facing RIO website, and the state’s mainframe retirement timeline, and staff agreed to provide updates later. Craig Falkley reported on coordination of services with political subdivisions and higher education, including StageNet, cybersecurity, radio/911 services, and PeopleSoft coordination. He also explained distributed ledger technology as a tool for transparency and fraud prevention, but said it is not widely used in state government and suggested the report be modernized to focus more broadly on emerging technologies such as AI and cybersecurity. The committee generally agreed that the topic should be updated. Chris Gurgan presented the mandatory cybersecurity incident reporting program created by HB 1314, explaining how agencies and political subdivisions report incidents through NDIT’s website or service desk. He said 77 incidents had been reported since 2021, 47 met the statutory definition, and most were phishing-related; most reported incidents were resolved, with one recent ransomware matter still open. He also reviewed notable incidents since the last report, including the PowerSchool compromise, a SimpleHelp intrusion at a school district, a court intrusion, a WSUS vulnerability, a business email compromise, and a recent ransomware incident involving a non-state critical infrastructure entity. Members asked about recovery of stolen funds, early warning signs, smishing, training, MFA, conditional access, and cybersecurity maturity assessments; Gurgan said the state uses MFA and conditional access, provides awareness training to state employees, and would return with more information on maturity assessments. Tony Ambrose then updated the committee on the K-12 student information system bridge project. He said district implementation of Infinite Campus had begun statewide, but the data migration vendor originally selected was terminated for poor performance and replaced by Aurora Educational Technology, which had experience with similar statewide migrations. He also said DPI is migrating special education data from Tynet into Infinite Campus, and that some SLDS-based tools such as e-transcripts and Choice Ready may not function exactly as they do now at July 1, requiring interim or alternative solutions. Members raised concerns about summer school disruptions, the timing of the cutover, and whether the new system would support existing reporting and transcript functions; DPI said it was working on identity, authentication, data-sharing agreements, and post-go-live integrations, and would continue to refine the plan beyond June 30.

Transcript Highlights:

• The Office of Management and Budget, or OMB, is the federal office that prescribes what must be tested
• However, OMB does not require all federal programs to be audited every year.
• Because Medicaid has historically been identified by OMB as high risk, it must be audited every year.

Committee: All LEGISLATIVE JOINT AUDITING-MEDICAID SUBCOMMITTEE

Summary: The Medicaid Subcommittee of the Legislative Joint Auditing Committee met to adopt the November 2018 minutes and receive a primer on the subcommittee’s role and Medicaid oversight in Arkansas. Legislative audit staff reviewed the subcommittee’s history and explained that Medicaid is audited annually through the statewide single audit because it is a high-risk federal program. Staff summarized recent audit findings, including weaknesses in eligibility and data-matching controls, improper use of Medicaid funds for partially non-Medicaid work, issues with incarcerated juveniles’ coverage, the absence of a Medicaid recovery audit contractor program exception request, reporting problems involving MFCU recoveries, and provider eligibility documentation concerns. Staff also noted a DHS departmental audit finding involving employees who improperly received benefits, which was referred for further action. The Department of Human Services gave an overview of Medicaid’s structure, eligibility, delivery systems, and budget. DHS described Arkansas Medicaid as covering about 850,000 people through fee-for-service, managed care, and premium assistance for the expansion population, and outlined major spending categories such as institutional care, long-term services, pharmacy, capitated payments, and supplemental payments. DHS also explained the difference between state plan amendments and waivers, and said it has a beneficiary-fraud unit that refers cases to local prosecutors. The Office of Medicaid Inspector General described its role in detecting and preventing fraud, waste, and abuse, distinguishing between suspensions for credible allegations of fraud and recovery actions for mistakes or overpayments. OMIG said it works with DHS and law enforcement, issues quarterly and annual reports, and has increased recoveries in recent years. The Attorney General’s Medicaid Fraud Control Unit explained that it prosecutes provider fraud criminally and civilly, can also handle long-term care neglect, abuse, and exploitation cases, and works with local prosecutors as special deputies. Committee members asked about court venue, provider suspensions, beneficiary fraud, education of providers, and the status of Medicaid expansion work requirements; DHS said it is preparing to implement community engagement requirements under HR 1 and will begin with a soft launch before full enforcement. No formal votes were taken beyond adoption of the minutes, and the meeting adjourned after questions were answered.

Transcript Highlights:

• Career and Tech Ed, who is the current tenant on that floor, that that funding would be replaced in the OMB
• Placed in the OMB budget to kind of make our operating budget whole, because we fund our utilities and

Bills: SB2014

Committee: Senate Appropriations - Government Operations Division

Summary: The Government Operations Division met to continue work on the remaining bill and related amendments. Joe Morse asked the committee to include a $219,000 general fund replacement for rent that would no longer be collected from Career and Technical Education after the 15th floor of the tower becomes legislative space under the Legislative Council’s jurisdiction. Members discussed that state law currently requires rent only from executive branch office space, not legislative or judicial space, and there was no objection to adding the request to the amendment package. The committee then revisited a set of amendments it had previously discussed, including whether to include funding for Prairie Public. Senator Dwyer argued against any Prairie Public funding, citing its reserves, endowment, and charitable gaming revenue, and said the state should prioritize other needs. Senator Irby supported a one-time infrastructure contribution as the state shares in related infrastructure costs. Senator Sickler said Prairie Public still provides unique local programming, but that a one-time infrastructure item would be a reasonable compromise rather than ongoing operating support. A motion was made and seconded to provide Prairie Public $850,000 from the Strategic Investment and Improvement Fund for infrastructure needs. The roll call vote failed 3-2, with Senators Sickler and Irby voting aye, Senators Dwyer and Burkhard voting no, and Chairman Wanzek voting yes. After that vote, the committee indicated the amendment package was otherwise complete, though leadership had asked that final action on the bill be held for a little longer. The meeting adjourned with the understanding that more amendments could still be brought forward before the next meeting.

Transcript Highlights:

• start in the Congress, the administration is as well there's been a flurry of activity already with new OMB
• We've sent a letter to OMB urging them to acknowledge that tribal programs are not just about the federal
• The letter that you sent to OMB recognizing our unique status and requesting a government-wide exemption

Committee: Senate Indian Affairs Committee

Keywords: tribal sovereignty, healthcare, education, public safety, Economic Development, Tax Parity Act, PROTECT Act, trust obligations, bipartisan support, Indian Health Services

Summary: The committee meeting focused on crucial issues facing tribal nations, particularly emphasizing the federal government's trust and treaty obligations. The discussions highlighted ongoing challenges such as disparities in healthcare, education, and public safety within Native communities. Chair Murkowski underscored the importance of listening to Native leaders and aligning congressional efforts with community needs, advocating for legislative actions that support tribal sovereignty and economic development. Various initiatives, including the Tax Parity Act and the PROTECT Act, aimed at addressing jurisdictional and financial disparities, were discussed in detail. A call for bipartisan support to alleviate the funding shortages affecting Indian Health Services was made several times during the meeting. Testimonies from tribal leaders and representatives emphasized the dire need for legislative support to enhance infrastructure, healthcare access, and public safety initiatives in tribal communities.

Transcript Highlights:

• We've got some presentations today by ITD and OMB.
• So I don't know who's leading off, whether it's OMB or a... Couple months.
• From what you heard, do you think we could fund OMB without doing the university system?
• You see here's two agencies, emergency services and OMB. Up and to the right is a good thing.
• Agencies, emergency services, and OMB. Up and to the right is a good thing.

Committee: Joint Information Technology Committee

Summary: The committee received a series of informational reports from NDIT and DPI on major IT projects, cybersecurity, and the K-12 student information system transition. Justin Data reviewed the quarterly major project portfolio, noting 111 projects totaling about $542.8 million, generally under budget and slightly behind schedule overall. He highlighted three schedule-red projects: Bed Management System and Vital Records, both now complete and being closed out, and the Roadway Capital Planning Project, which is delayed due to vendor bug fixes after user testing. He also summarized new project startups, including the Attorney General’s Victim Notification System, HHS Medicaid correctional facilities data exchange, Highway Patrol’s motor carrier e-permit system, and additional RIMS work, and answered questions about project timing, funding, and whether work had begun on legislatively funded IT projects. Chris Gurgan, NDIT’s chief information security officer, reported on mandatory cybersecurity incident reporting under HB 1314. He said 77 incidents have been reported since August 2021, with 47 meeting the statutory definition of a cybersecurity incident; phishing remains the most common type, followed by email quarantine alerts, XDR detections, and malware. He emphasized that most incidents are resolved, but that timely reporting is critical for any chance of recovering funds in business email compromise or ransomware cases. He also described several notable incidents since the last report, including the PowerSchool breach, a SimpleHelp intrusion at a school district, a court intrusion, a WSUS vulnerability, a business email compromise at a K-12 district, and a recent ransomware report involving a non-state critical infrastructure entity. Members asked about smishing, MFA, conditional access, security awareness training, and recovery of lost funds; Gurgan said state systems use phishing-resistant MFA and conditional access, training is provided to state employees and offered to political subdivisions on an opt-in basis, and broader cybersecurity maturity assessments are underway. Craig Falkley gave brief reports on coordination with political subdivisions and higher education, including shared networking, cybersecurity, radio/911, PeopleSoft, and co-location services. He also explained distributed ledger technology as a tool for decentralized, secure data sharing, but said the state has limited use for it and would likely frame future reporting more broadly around emerging technologies. The committee then heard from Tony Ambrose of DPI on the statewide Infinite Campus implementation. He said district implementations are underway, but the project had to terminate its original data migration vendor for poor performance and replace it with Aurora Educational Technology, which had experience with a similar North Carolina migration. He also said DPI is moving special education data from Tynet into Infinite Campus, is still working through how to preserve e-transcripts and Choice Ready-type functionality after the PowerSchool transition, and is developing identity, authentication, and data-sharing arrangements for the summer cutover. Members raised concerns about procurement timing, summer school disruption, and whether some functions would be ready by July 1.