Legislature(2025 - 2026)SENATE FINANCE 532
04/15/2025 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| University of Alaska Finance Budget Subcommittee of the Whole Close-out | |
| SB92 | |
| SB137 | |
| SB133 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 92 | TELECONFERENCED | |
| + | SB 137 | TELECONFERENCED | |
| + | SB 133 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
April 15, 2025
9:01 a.m.
9:01:23 AM
CALL TO ORDER
Senator Kiehl called the Senate Finance Committee meeting
to order at 9:01 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Mike Cronk
Senator James Kaufman
Senator Jesse Kiehl
Senator Kelly Merrick
MEMBERS ABSENT
None
ALSO PRESENT
Cathy Schlingheyde, Staff, Senator Jesse Kiehl; Senator
Cathy Giessel, Sponsor; Senator Jesse Bjorkman, Sponsor;
Liz Harpold, Staff, Senator Donny Olson; Kris Curtis,
Director, Legislative Audit; Jared Kosin, President and
Chief Executive Officer, Alaska Hospital and Healthcare
Association.
PRESENT VIA TELECONFERENCE
Rebecca Logan, Chief Executive Officer, The Alliance,
Anchorage; Adam Hasse-Zamudio, Self, Washington DC; Mary
May, Self, Soldotna; Thomas Bacherk, Self, Fairbanks; Scott
Crass, Self, Fairbanks; Sarah Furman, Self, Fairbanks;
Cathy Walling, Self, Fairbanks; Jesse Carlstrom, Self,
Anchorage; Theresa Obermeyer, Self, Anchorage; Gary
Strannigan, Premera Blue Cross and Blue Shield of Alaska,
Everett, Washington.
SUMMARY
SB 92 CORP. INCOME TAX; OIL & GAS ENTITIES
SB 92 was HEARD and HELD in committee for further
consideration.
SB 133 INSURANCE; PRIOR AUTHORIZATIONS
SB 133 was HEARD and HELD in committee for
further consideration.
SB 137 EXTEND BOARDS: MIDWIVES, NURSING, PAROLE
SB 137 was HEARD and HELD in committee for
further consideration.
UNIVERSITY OF ALASKA FINANCE BUDGET SUBCOMMITTEE OF THE
WHOLE CLOSE-OUT
Senator Kiehl discussed the agenda.
^UNIVERSITY OF ALASKA FINANCE BUDGET SUBCOMMITTEE OF THE
WHOLE CLOSE-OUT
9:02:52 AM
Co-Chair Hoffman MOVED to ADOPT the FY 26 Senate Finance
Budget Subcommittee budget action report for the University
of Alaska and give the Legislative Finance Division the
authority to make technical and conforming changes.
Senator Kiehl OBJECTED for discussion.
9:03:49 AM
CATHY SCHLINGHEYDE, STAFF, SENATOR JESSE KIEHL, reviewed
the Narrative Closeout Report for the University of Alaska
(UA) Subcommittee (copy on file). She listed the fund
groups and position recommendations as follows:
Fund Group: (dollars are in thousands) Senate Sub
Unrestricted General Funds (UGF) 347,566.9
Designated General Funds 312,888.3
Other Funds 219,148.0
Federal Funds 214,786.2
TOTAL FUNDS 1,094,389.4
Positions:
Permanent Full-time 3,860
Permanent Part Time 343
Temporary 0
TOTAL POSITIONS 4,203
Ms. Schlingheyde relayed that the subcommittee took a close
look at the budget, and an even-handed approach to the
requests from all three universities. The Senate Finance
Subcommittee approved all structural changes related to the
establishment of new Facilities Operations and Maintenance
allocations, moving the technical vocational education
program to the language section of the budget, and renaming
the Fairbanks campus to match its indigenous name. The
subcommittee accepted all university-generated funds.
Ms. Schlingheyde continued that the subcommittee accepted
the adjusted base, including contractual pay and benefit
increases, but did not accept discretionary pay and benefit
increases. The subcommittee found greater efficiency was
possible in the Board of Regents and reduced travel,
catering, and the second support staff position. The
university had found three positions that would not be
refilled as a result of board action, and the subcommittee
recommended deleting the positions. The subcommittee
recommended the full Finance Committee reappropriate the
remaining unspent funds to pursue R1 status from the FY 25
budget as the University is not on track to achieve R1
status in this cycle
Senator Kiehl noted that there were UA staff online for
answering questions.
9:05:24 AM
Senator Kiehl WITHDREW his objection. There being NO
OBJECTION, it was so ordered.
Senator Kiehl thanked the committee.
9:05:56 AM
AT EASE
9:07:44 AM
RECONVENED
Senator Kiehl handed the gavel to Co-Chair Hoffman.
SENATE BILL NO. 92
"An Act establishing an income tax on certain entities
producing or transporting oil or gas in the state; and
providing for an effective date."
9:08:11 AM
SENATOR CATHY GIESSEL, SPONSOR, reintroduced the
legislation. She expressed that the bill was a simple
update to the state's corporate tax structure and would
place the same responsibility on the many types of
corporations that were profiting from the state's oil and
gas resources. She stressed that the bill effectuated the
state constitution in ensuring that the state received
maximum benefit for the people in the state.
9:09:07 AM
Co-Chair Hoffman OPENED public testimony.
9:09:40 AM
REBECCA LOGAN, CHIEF EXECUTIVE OFFICER, THE ALLIANCE,
ANCHORAGE (via teleconference), testified against SB 92.
The Alliance opposed the bill, which she thought clearly
targeted one company and one industry and ignored future
investment. She asserted that Hilcorp had invested in Cook
Inlet, which had led to increased oil and gas production
and delayed shortages. Hilcorp had invested in the North
Slope, resulting in greater production than would otherwise
have happened. She thought the tax policy in 2012 had led
to more production and more royalties.
9:11:35 AM
ADAM HASSE-ZAMUDIO, SELF, WASHINGTON DC (via
teleconference), spoke in support of the legislation. He
supported closing the tax loophole that benefited out-of-
state corporations. He did not think the tax loophole
incentivized companies to support the state's economy. He
referenced the constitution.
9:12:50 AM
MARY MAY, SELF, SOLDOTNA (via teleconference), testified in
support of SB 92. She thought 77 percent of Alaskans were
in support of the bill's proposal. She referenced the state
constitution. She thought Hilcorp paid taxes in every state
except Alaska. She emphasized that there was no evidence
that giving a tax break to S corporations would bring more
revenue to the state. She noted that the bill targeted
companies with taxable income over $5 million and would not
affect small businesses. She thought it was far past time
that the state benefited from the extraction of resources.
She mentioned attrition because of crumbling infrastructure
and under funded schools.
9:16:05 AM
THOMAS BACHERK, SELF, FAIRBANKS (via teleconference), spoke
in support of the bill. He thought it was far overdue for
such a change. He thoguht there was no reason S
corporations should be given an advantage over C
corporations. He approved of the additional funds to state
coffers to fund education and state services. He pointed
out that the company could deduct any state tax from its
federal tax liability.
9:17:51 AM
SCOTT CRASS, SELF, FAIRBANKS (via teleconference),
testified in support of the legislation. He thought the
bill was common-sense reform that would bring over $100
million into the state's revenue. He thought Alaska was the
only state that did not collect income tax from C
corporations. He did not think the bill was punitive, but
thought it leveled the playing field. He thought the bill
was a long-overdue alignment with other states. He
referenced the state constitution. He thought the reform
would allow the state to recapture tax dollars sent to the
federal government. He thought the bill encapsulated years
of recommendations from fiscal working groups.
9:20:12 AM
SARAH FURMAN, SELF, FAIRBANKS (via teleconference), spoke
in support of the bill. She was concerned about the outlook
for the state budget and the projected deficit. She
referenced school closures in Fairbanks. She supported
increases in education spending and energy investment and
thought the bill would bring in much-needed revenue. She
thought it was unfair that some corporations paid state
income tax while others did not. She thought every other
state required S corporations to pay tax. She cited recent
polling that indicated 70 percent of Alaskans supported the
bill.
9:22:37 AM
CATHY WALLING, SELF, FAIRBANKS (via teleconference),
testified in support of the legislation. She thanked the
other testifiers and echoed their comments. She thought the
bill was a long-awaited effort to close a loophole. She
supported more revenue generation and leveling the playing
field. She thought the state and country were in a very
different position than it was in 2012.
9:25:06 AM
JESSE CARLSTROM, SELF, ANCHORAGE (via teleconference),
spoke against the bill. He had lived in Alaska for over 30
years and worked in the shipping industry. He thought the
bill was bad policy that targeted one company and one
industry. He thought the bill ignored what Hilcorp had done
for the state. He discussed Hilcorp's payment of royalties
and its investments. He discussed job creation. He was
concerned about the message the bill sent to those wanting
to invest in the state.
9:26:47 AM
THERESA OBERMEYER, SELF, ANCHORAGE (via teleconference),
testified in support of the legislation. She associated
herself with the comments made earlier in support of the
bill. She lived in the state for 47 years. She thought the
state was at a turning point. She thought the tax regime
should have been changed in 2020. She mentioned former
Governor Frank Murkowski and his support of the bill.
Co-Chair Hoffman CLOSED public testimony.
SB 92 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 137
"An Act extending the termination date of the Board of
Certified Direct-Entry Midwives; extending the
termination date of the Board of Nursing; extending
the termination date of the Board of Parole; and
providing for an effective date."
9:29:11 AM
SENATOR JESSE BJORKMAN, SPONSOR, introduced the
legislation. He relayed that the bill would extend the
board sunset date for three boards from the current
statutory sunset dates of June 30 of the current year. The
state's 2024 audits of the Board of Certified Direct-Entry
Midwives and the Board of Nursing recommended a termination
date of 6 years until 3031, while the audit of the Board of
Parole recommended extending the termination date by 4
years. The bill followed the state audit's recommendations.
He read a list of testifiers to speak to the bill.
Senator Kiehl MOVED to ADOPT the committee substitute for
SB 137, Work Draft 34-LS0732\N (Gunther, 4/11/25).
Co-Chair Hoffman OBJECTED for discussion.
9:31:33 AM
LIZ HARPOLD, STAFF, SENATOR DONNY OLSON, explained the
committee substitute. She detailed that the CS included the
Board of Veterinary Examiners. The audit recommended a
five-year extension for the board, which would now sunset
in 2031.
Co-Chair Hoffman removed his objection. There being NO
OBJECTION, it was so ordered.
9:32:29 AM
KRIS CURTIS, DIRECTOR, LEGISLATIVE AUDIT, discussed the
audit. The CS extended the sunset date of four boards. She
read from the audit for the Board of Veterinary Examiners
(copy on file):
The audit concluded that the board served the public's
interest by conducting meetings in an effective
manner; actively amending regulations to address
statutory changes, protect the public, and improve the
licensing process; and effectively licensing
veterinary professionals. The audit also concluded
that board related cases were not consistently
investigated in a timely manner, two board positions
had expired terms, and as of January 31, 2024, one
board position had been vacant for 31 months.
Additionally, the audit found that the final version
of regulation changes published in 2023 was not
reviewed or approved by the board.
Ms. Curtis discussed three recommendations beginning on
page 11:
Recommendation 1 DCBPL's director should create
procedures to ensure the final draft of regulations
are provided to occupational boards for review and
approval before regulations are filed and made
effective.
Recommendation 2 The Boards and Commissions director
should work with the board to identify potential
applicants to fill board seats in a timely manner.
Recommendation 3 DCCED's commissioner should work with
policymakers to improve the recruitment and retention
of investigators.
Ms. Curtis explained that it was found that the final
version of the veterinarian-client patient relationship
regulations had omitted language that the board had
intended to be enacted. The discrepancy was due to changes
made by the Department of Law that were intended to be
inconsequential.
Ms. Curtis relayed that auditors reviewed nine board-
related cases open for over 180 days during the audit
period and found four with the following periods of
unjustified inactivity that ranged from 111 days to 695.
Management's response to the audit began on page 23. The
commissioner, the board chair, and the director of the
Division of Corporations, Business, and Professional
Licensing (DCBPL) and concurred with the conclusions.
Ms. Curtis addressed the audit of the Board of Parole (copy
on file). She recommended only a four-year extension of the
board, which reflected the need for a more timely
legislative oversight in light of the report conclusions.
She addressed the conclusions beginning on page 8 of the
audit:
Board staff positions authorized by criminal justice
reform continued to be funded despite the subsequent
repeal.
Ms. Curtis explained that an additional four parole hearing
officers and one additional criminal justice technician
were authorized during FY 17 as part of a criminal justice
reform bill (SB 91) for a recurring annual cost of
$591,000. The positions helped the board effectively cope
with the increase in workload. Most criminal justice reform
bills were repealed by HB 49 in 2019, and as a result
discretionary parole hearings decreased. She cited Exhibit
3 on page 9 of the audit, which showed that discretionary
parole hearings returned to the level that existed before
SB 91. Exhibit 4 showed that the number of parole
revocation hearings after HB 49 was lower than the level
before passage of SB 91. Despite the decrease in workload,
HB 49 did not reduce the staff positions and the audit
questioned whether the additional positions were necessary.
Ms. Curtis moved to page 10 of the audit, which cited that
the board had generally conducted parole hearings in
compliance with state law, however the audit noted that
parole was approved at a much lower rate after criminal
justice reform bills were repealed. She highlighted Exhibit
5 on page 11, and relayed that the board could not provide
an explanation for the decrease. She listed three
recommendations beginning on page 14:
Recommendation 1
The board chair should work with DOC's commissioner to
ensure all hearings are conducted in a confidential
manner.
Recommendation 2
The board chair and DOC's commissioner should ensure
regulations are updated in a timely manner.
Recommendation 3
DOC's commissioner should ensure fiscal notes for
pending legislation properly reflect decreases, as
appropriate.
Ms. Curtis highlighted that the audit found that
preliminary revocation hearings held at the Hiland Mountain
Correctional Center were periodically conducted in a
general population area during the audit period. She
continued that the parole regulations had not been updated
since 2015 despite significant statutory changes.
Ms. Curtis relayed that management's response to the audit
began on page 25. The Department of Corrections
commissioner and board chair concurred with the
recommendation. Corrective action had taken place related
to conducing parole hearings in a confidential manner and
updated regulations. The board chair did not agree with the
report's conclusions regarding the decreasing rate that
parole had been approved. He had stated that Exhibit 5
created inaccurate comparisons and suggested the individual
parole hearings could not be compared as each was unique.
Co-Chair Stedman was glad to hear the audit found there was
a decrease in paroles granted. He realized the state was
struggling with the cost of prisons. He thought the public
was better off than previously.
9:39:09 AM
Ms. Curtis addressed the audit for the Board of Nursing
(copy on file). She detailed that overall, the audit found
the Board of Nursing served the public's interest by
effectively conducting its meetings, actively amending
nursing regulations, and effectively licensing nursing
professionals. The audit also concluded that board-related
cases were not consistently investigated in a timely
manner, and one board position had been vacant for an
extended period. The audit recommended a six-year extension
for the board.
Ms. Curtis directed attention to Exhibit 3 on page 8, which
showed that as of February 2024, the board had over 27,000
active licenses, which was a 37 percent increase compared
to 2018 audit. The increase was largely made up of
registered nurses traveling to Alaska in response to the
COVID-19 pandemic. The board's schedule of revenues was on
page 10. As of 2024, the board had a surplus of
approximately $3.4 million. Despite the large surplus, the
board was not anticipating decreasing fees; because it
believed the high number of licenses would decrease as
people did not renew in the future.
Ms. Curtis cited that the audit included one recommendation
for improvement on page 14:
Recommendation 1
Department of Commerce, Community and Economic
Development's (DCCED) commissioner should work with
policy makers to improve the recruitment and retention
of investigators.
Ms. Curtis detailed that the audit had reviewed 35 board-
related cases and found approximately 25 percent had
unjustified periods of inactivity. Some of the cases had
multiple periods of inactivity, which were listed on page
14. The delays were caused by turnover, vacancies, and the
time taken to train new investigators. Management's
response to the audit started on page 23, the commissioner
and the board chair concurred with the conclusions and the
recommendations.
Ms. Curtis addressed the audit for the Board of Certified
Direct-Entry Midwives. The audit found that the board
served the public's interest by effectively conducting its
meetings in accordance with state law, and by actively
amending regulations to enhance public safety and improve
the certification process. The audit also concluded that
the board generally certified midwives in compliance with
state law, but documentation improvements were needed.
Furthermore, the audit found the board did not audit
compliance with certification renewal requirements in a
timely manner. The audit recommended a six-year renewal.
Ms. Curtis directed attention to page 5 of the audit, which
discussed a change in how midwives were certified
(certified was another term for licensure). In January
2023, the board adopted regulation changes that required
certified direct-entry midwives to hold a credential from
the North American Registry of Midwives (NARM). As a
result, some board functions duplicated the functions of
the national organization. Prior to the change, midwives
already had one of the highest costs of licensure of any
occupation, and as a result the cost increased.
Ms. Curtis discussed audit recommendations starting on page
12:
Recommendation 1:
The Office of the Governor, Boards and Commissions
director should work with the board to identify
potential applicants to fil board seats in a timely
manner.
Recommendation 2.
DCBPL's director should improve training to ensure
certifications are supported by adequate
documentation, and board members should adequately
review applications prior to approval.
Recommendation 3:
DCCED's commissioner should work with policymakers to
improve the recruitment and retention of DCBPL
licensing staff.
Ms. Curtis noted that the physician board seat had been
vacant the entire audit period, and that it had been many
years since the seat had been filled. It was also found
that staff were not auditing compliance with the renewal
requirements due to changes in management and staff
shortages. Management's response to the audit began on page
23. In general, the commissioner and the Office of the
Governor Boards and Commissions director concur with the
conclusions and recommendations. The board chair was less
agreeable, and her response began on page 27. She pointed
out that the recommendations were mostly addressed to the
Office of the Governor or DCBPL, and as such she requested
a full eight-year extension.
9:43:45 AM
Co-Chair Hoffman OPENED public testimony.
Co-Chair Hoffman CLOSED public testimony.
9:44:17 AM
Senator Kiehl addressed FN 1 from the Department of
Commerce, Community and Economic Development OMB 2360,
which covered both the nursing and midwifery boards. The
note addressed ongoing $38,600 in receipt supported
services, which was included in the governor's FY 26 budget
request and projected the same cost in the future.
Senator Kiehl spoke to FN 2 from the Department of
Corrections, OMB Component 695. The note showed $1,938,800
in Unrestricted General Funds that was included in the
governor's FY 26 budget request. The amount was expected to
continue unchanged until the new sunset date following FY
30.
SB 137 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 133
"An Act relating to prior authorization requests for
medical care covered by a health care insurer;
relating to a prior authorization application
programming interface; relating to step therapy; and
providing for an effective date."
9:45:45 AM
SENATOR JESSE BJORKMAN, SPONSOR, introduced the bill. The
bill dealt with prior authorization and focused on the
process before someone received medical care. He discussed
long wait times prior to insurance approval for vital
health care. He relayed that medical providers, hospitals,
and insurance companies had met over the course of the
previous interim and summer to streamline the prior
authorization system. The bill established a timeframe for
approvals, specific communication requirements, and
deadlines. If insurance did not approve healthcare nor
receive a response, it would default to care being
provided. The bill encouraged the use of electronic data
transmission through the insurer's website or portal, and
the bill provided the director of insurance with the
authority to monitor compliance and provide enforcement. He
relayed that the director was available for questions.
9:48:14 AM
JARED KOSIN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, ALASKA
HOSPITAL AND HEALTHCARE ASSOCIATION, commented in support
of the bill. He strongly supported the bill, which sought
the reform of the prior authorization process. He thought
the current process was useful but flawed, in that it could
lead to long delays. He recognized that the bill was a
collaborative effort to improve thew process for patients.
The bill would speed up the process from 5 working days to
72 hours and would provide long-term approvals for chronic
conditions. He thought the bill was comprehensive and had
many stakeholders in support.
9:49:54 AM
GARY STRANNIGAN, PREMERA BLUE CROSS AND BLUE SHIELD OF
ALASKA, EVERETT, WASHINGTON (via teleconference), relayed
that Premera was a non-profit health plan that had been
serving Alaskans since before statehood. He relayed that
Premera felt that efforts to promote the affordability of
its products was key to continuing to provide care. He
discussed affordability restricting access to healthcare.
He thought it was well-publicized that some carriers had
been aggressive and using prior authorization for 20
percent of all claims, while Premera used it for 2 percent.
He thought the bill would help providers modernize and
streamline the process. He thought the bill would help
incentivize the adoption of an electronic process. He
thought the bill represented a set of reasonable
compromises by all parties.
Co-Chair Hoffman OPENED public testimony.
Co-Chair Hoffman CLOSED public testimony.
Senator Kiehl reviewed FN 1, a zero fiscal note from the
Department of Commerce, Community and Economic Development.
SB 133 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
9:53:02 AM
The meeting was adjourned at 9:53 a.m.