Legislature(2025 - 2026)ADAMS 519
03/11/2026 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB265 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 263 | TELECONFERENCED | |
| += | HB 265 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 11, 2026
9:06 a.m.
9:06:06 AM
CALL TO ORDER
Co-Chair Josephson called the House Finance Committee
meeting to order at 9:06 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Andy Josephson, Co-Chair
Representative Calvin Schrage, Co-Chair
Representative Jamie Allard
Representative Jeremy Bynum
Representative Alyse Galvin
Representative Sara Hannan
Representative Nellie Unangiq Jimmie
Representative Elexie Moore
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Alexander Schroeder, Staff, Representative Andy Josephson.
SUMMARY
HB 263 APPROP: OPERATING BUDGET;AMEND;SUPP
HB 263 was HEARD and HELD in committee for
further consideration.
HB 265 APPROP: MENTAL HEALTH BUDGET
HB 265 was HEARD and HELD in committee for
further consideration.
Co-Chair Josephson reviewed the meeting agenda. He
explained that the committee would consider committee
substitutes (CS) for both HB 263 and HB 265. He relayed
that committee packets included the new proposed CS for
both HB 263 and HB 265, the inline comparison document for
HB 263, the redline comparison document for HB 265, summary
of changes documents, agency summary totals (all funds),
agency summary totals (UGF only), transaction compare
documents, and a numbers only transaction compare document
(copy on file).
HOUSE BILL NO. 263
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making supplemental appropriations;
making appropriations under art. IX, sec. 17(c),
Constitution of the State of Alaska, from the
constitutional budget reserve fund; and providing for
an effective date."
HOUSE BILL NO. 265
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
9:08:18 AM
Co-Chair Schrage MOVED to ADOPT the proposed committee
substitute for HB 263, Work Draft 34-GH2498\H (Marx,
3/5/26).
Co-Chair Josephson OBJECTED for the purpose of explanation.
He asked his staff to describe the changes in the CS.
9:09:01 AM
ALEXANDER SCHROEDER, STAFF, REPRESENTATIVE ANDY JOSEPHSON,
reviewed the changes in the CS. He read from prepared
remarks:
Before we begin, I would like to clarify for the
record what is House Committee Substitute 2 (or HCS2).
HCS2 refers to the combination of HB 263, version H,
the operating bill) and HB 265, version G (the Mental
Health bill). The Legislative Finance Division reports
in members' packets today refer to both bills when
tracking totals and item changes.
Before the committee is a proposed committee
substitute for HB 263: the Operating bill, work draft
34-GH2498|H.
The only changes made between version G and version H
are changes recommended in the subcommittee close-out
reports. There were no alterations made to
subcommittee recommendations, A few things worth
noting:
First, there were items approved by the subcommittees
that impacted, and required coordination between,
multiple agencies These include the following:
• Elimination of the Shared Services of Alaska
division and transfer of those functions back to
the various agencies. This required approving
transfer of
57 Permanent Full-Time positions to the agencies
to support accounting functions, such as account
payables, travel, and expense activities. Funding
for these positions remained in the agencies
during the original consolidation in FY18, so no
funding accompanied the transfers.
• Transfer of Payroll processing functions from
Department of Administration back to agencies
which requested to reclaim these functions. These
Department's included Corrections, Fish and Game,
Law, Military and Veterans' Affairs, Natural
Resources, Public Safety, and Transportation and
Public Facilities. The remaining agencies opted
to continue with the existing centralized
processing and oversight in DOA.
• All Information Technology classification study
implementation increments were approved. The
total for those increments is $1.9 million
UGF/$7.9 million all funds.
The Second thing worth noting is, the Department of
Fish and Game subcommittee recommended an increment of
$400.0 UGF for Commercial Fisheries to supplant the
Bristol Bay Science Research Institute Contribution to
Port Moller.
• The subcommittee narrative and close-out report
for this department asked that a technical
correction be made to change the allocation from
Westward Region Fisheries Management to Central
Region Fisheries Management. We have made that
change in this committee substitute.
• That is reflected in the document titled "House
Subcommittee to HCS2 Numbers Only Compare."
The Third thing worth noting is, the Department of
Transportation and Public Facilities subcommittee
accepted the Alaska Marine Highway System move from a
calendar year to a multi-year structure.
• However, because language sections were not under
the purview of the subcommittees, the DOT
subcommittee could only accept the removal of
Alaska Marine Highway System funding from the
numbers section with the understanding that the
multi-year funding would be added to the language
section later.
•
The committee substitute before you adds the
multi-year language.
Co-Chair Josephson asked for confirmation that Mr.
Schroeder was referring to the version marked with a G
that was crossed out and replaced with an "H".
Mr. Schroeder responded in the affirmative.
9:12:52 AM
Mr. Schroeder continued reading the remarks:
• If you turn to pages 58, 59, and 60 of the inline
delete sections 4, 5, and 6. These sections were the
operating expenditures of the Alaska Marine Highway
System in the numbers sections.
• If you then turn to page 69, beginning on line 28,
the Alaska Marine Highway System is restored to a
multi-year operating structure.
• Lastly, if you turn to the last page, page 84, you
can see on line 18 that Section 35 is deleted. This
section was the effective date for the previous
calendar year structure for the Alaska Marine
Highway System.
That concludes my remarks on specific changes in
version H. Now, I would like to take a moment to talk
about overall fund totals.
There are two useful ways to review agency fund totals
in this committee substitute:
• The first is the difference between HCS1 and
HCS2.
- HCS1 to HCS2 tells the reviewer everything
that has been added above the adjusted base,
including Governor's requests and
subcommittee changes.
• The second is the difference between Gov Amend
and HCS2.
- Gov Amend to HCS2 tells the reviewer
specifically what the subcommittee changed
with regard to the Governor's requests.
Although statewide items are included in the Agency
Summary documents in your packets, statewide items
were not changed in this committee substitute.
Therefore, I will ignore statewide items in the
following fund totals.
The net change between HCS1 and HCS2 for FY27 agency
operations is the following:
• An increase of $147,728,800 in Unrestricted
General Funds
• An increase of $8,123,100 in Designated General
Funds
An increase of $17,584,600 in Other State Funds
• An increase of $415,289,700 in Federal Receipts
Again, these fund totals represent the net change when
taking together the Governor's amendments and the
subcommittee recommendations to the adjusted base.
The net change between Gov Amend and HCS2 for FY27
agency operations is the following:
• An increase of $42,778,100 in Unrestricted
General Funds
• A decrease of $14,950,100 in Designated General
Funds
A decrease of $14,623,000 in Other State Funds
• A decrease of $256,735,200 in Federal Receipts
Again, this is the total fund change when comparing
just the subcommittee changes to Governor's
amendments.
That concludes the differences between HB 263, version
G, and HB 263, version H.
9:15:58 AM
Co-Chair Josephson asked why there was a decrease of
approximately $256 million in federal receipts.
Mr. Schroeder responded that the governor's amendments
submitted on February 18, 2026, included funding for the
Rural Health Transformation Fund and added approximately
$272,175,000 in federal receipt authority. He explained
that the federal receipts had not yet been incorporated
into the CS because there were no corresponding changes to
the language section of the bill.
Representative Stapp referred to page 10 of the redline
version under K12 support. He remarked that the figure
contained many commas and digits and it was difficult to
interpret. He suggested that the figure might be a drafting
error and asked whether clarification could be provided.
Mr. Schroeder responded that the question might be better
directed to the Legislative Finance Division (LFD). He
noted that staff from LFD were not currently present in the
room.
Representative Galvin suggested that the figure might be
easier to identify in a different version of the bill. She
wondered if the number was listed in the same format under
the Department of Education and Early Development (DEED)
section.
Mr. Schroeder responded that the figure might actually
represent two numbers: one number that was an appropriation
and one number that was a general fund total. He thought
the numbers might appear to be "smushed" together.
Co-Chair Josephson noted that Mr. Schroeder was correct and
that the figure was two numbers.
Representative Galvin clarified that the figure appeared on
page 10 in the redline version.
Co-Chair Josephson added it was on line 17.
9:19:37 AM
AT EASE
9:20:09 AM
RECONVENED
Representative Stapp referred to page 14 of the redline
document and noted that it contained lengthy intent
language related to the Office of Children's Services
(OCS). He asked for an explanation of the purpose of the
language, particularly the portions directing reporting
requirements for positions within OCS.
Co-Chair Josephson asked Mr. Schroeder if the referenced
language was wordage.
Mr. Schroeder replied that the language had been added
during the subcommittee process through a single amendment.
The amendment included all of the OCS language referenced
by Representative Stapp. He stated that the intent was to
clean up the language in a future CS.
Co-Chair Josephson noted that he had chaired the Department
of Family and Community Services (DFCS) subcommittee and
the language reflected testimony received by the
subcommittee and the findings of three phases of an audit
examining the operations of OCS. He noted that there had
been concerns originally addressed through HB 151 [passed
in 2018 by the Thirtieth Alaska State Legislature]. Some
portions of the intent language had direct fiscal
implications, while other portions focused on policy
direction and oversight. The language expressed the
subcommittee's concern about improving child placement
outcomes and addressing workforce retention challenges
within OCS. The language also sought to emphasize the
seriousness with which the subcommittee viewed those
issues.
Co-Chair Josephson added that he interpreted Mr.
Schroeder's remarks to mean that the intent was to include
the language as it had been presented by the subcommittee
to ensure that the subcommittee's work would be accurately
reflected. He suggested that a future language amendment
could make language clearer and easier to read.
9:23:23 AM
AT EASE
9:23:57 AM
RECONVENED
Co-Chair Josephson WITHDREW the OBJECTION.
Representative Allard OBJECTED.
9:24:10 AM
A roll call vote was taken on the motion.
IN FAVOR: Jimmie, Galvin, Hannan, Foster, Schrage,
Josephson
OPPOSED: Allard, Stapp, Moore, Tomaszewski, Bynum
The MOTION PASSED (6/5).
There being NO further OBJECTION, Work Draft 34-GH2498\H
was ADOPTED.
HB 263 was HEARD and HELD in committee for further
consideration.
9:25:15 AM
Co-Chair Josephson requested a motion on HB 265.
Co-Chair Schrage MOVED to ADOPT the proposed committee
substitute for HB 265, Work Draft 34-GH2502\G (Marx,
3/6/26).
9:25:43 AM
Co-Chair Josephson OBJECTED for the purpose of explanation.
He asked Mr. Schroeder to review the changes.
Mr. Schroeder read prepared remarks:
Before the committee is the proposed committee
substitute for HB 265: the mental health bill, work
draft 34-GH2502\G. A redline comparing HB 265, version
I and HB 265, version G is included in members'
packets.
The only changes made between version I and version G
are changes recommended in the subcommittee close-out
reports. There were no alterations made to
subcommittee recommendations.
That concludes the differences between the HB 265,
version I, and HB 265, version G.
Co-Chair Josephson WITHDREW the OBJECTION. There being NO
further OBJECTION, Work Draft 34-GH2502\G was ADOPTED.
HB 265 was HEARD and HELD in committee for further
consideration.
Co-Chair Josephson reviewed the agenda for the afternoon's
meeting, which included public testimony on both budgets.
Representative Bynum asked for clarity on which budget the
committee would hear public testimony.
Co-Chair Josephson responded, "Both" [HB 263 and HB 265].
Representative Bynum asserted that the operating budget was
incomplete and many elements still needed to be addressed.
He asked if the public was expected to comment on items
that were not included in the bill during public testimony.
Co-Chair Josephson responded that the short answer was yes.
He explained that members of the public could testify on
whatever issues they wished to raise. He noted that the
Senate often took public testimony several weeks before
completing the detailed work that the committee was
currently undertaking. He suggested that Representative
Bynum was likely referring to issues such as education
funding and the Permanent Fund Dividend (PFD), which were
not addressed in the current version of the budget.
Representative Bynum confirmed that those were the types of
issues he was referencing. He explained that constituents
often asked him for information on what was occurring
during public testimony on the operating budget. He relayed
stated that his current response to the public had been
that the bill remained a work in progress and that much
work remained to be completed. He suggested that
constituents testify on their aspirations or priorities for
what they wanted to see included in the budget, rather than
only addressing the items currently contained in the bill,
because the bill was incomplete. He asked if his response
to the public accurately reflected the committee's
expectations for public testimony.
Co-Chair Josephson replied that the description was
accurate, but added that members of the public could also
testify on the provisions currently included in the bill,
either in support or opposition.
ADJOURNMENT
9:30:29 AM
The meeting was adjourned at 9:30 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2. HB 263 version G to H Compare Document 031026.pdf |
HFIN 3/11/2026 9:00:00 AM |
HB 263 |
| 1. HB 263 CS FIN Workdraft version H 031026.pdf |
HFIN 3/11/2026 9:00:00 AM |
HB 263 |
| 5. HB 263 v.H HCS2 All Funds Agency Summary 031026.pdf |
HFIN 3/11/2026 9:00:00 AM |
HB 263 |
| 6. HB 263 v. H HCS2 UGF Agency Summary 031026.pdf |
HFIN 3/11/2026 9:00:00 AM |
HB 263 |
| 7. HB 263 v.H HCS1 to HCS2 Trans Compare 031026.pdf |
HFIN 3/11/2026 9:00:00 AM |
HB 263 |
| 8. HB 263 v. H HCS1 to HCS2 Lang Only Compare 031026.pdf |
HFIN 3/11/2026 9:00:00 AM |
HB 263 |
| 9. HB 263 v. H GovAmd to HCS2 Trans Compare 031026.pdf |
HFIN 3/11/2026 9:00:00 AM |
HB 263 |
| 10. HB 263 v. H HSubCom to HCS2 Num Only Compare 031026.pdf |
HFIN 3/11/2026 9:00:00 AM |
HB 263 |
| 3. HB 265 CS FIN Workdraft version G 031026.pdf |
HFIN 3/11/2026 9:00:00 AM |
HB 265 |
| 4. HB 265 version I to G Compare Document 031026.pdf |
HFIN 3/11/2026 9:00:00 AM |
HB 265 |