Legislature(2025 - 2026)ADAMS 519
03/25/2025 01:30 PM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB56 | |
| HB53 || HB55 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 56 | TELECONFERENCED | |
| += | HB 53 | TELECONFERENCED | |
| += | HB 55 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 53
"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 reappropriations; 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. 55
"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."
1:42:29 PM
Co-Chair Josephson reviewed four amendments he intended to
offer. Amendment 1 would fold in collective bargaining unit
salary adjustments. Amendment 2 included intent and
conditional language and structure change. He noted that
many of the items had been recommended by the
subcommittees. He stated that Amendment 3 was to the HB 55
language section and was fairly perfunctory. Amendment 4
included his proposed language section changes to HB 53. He
noted that members had received a copy of bluelined and
redlined versions of the previous draft (copy on file).
1:44:39 PM
Co-Chair Josephson asked his staff to come to the table.
Co-Chair Josephson MOVED to ADOPT Amendment 1 (copy on
file).
Representative Stapp OBJECTED for discussion.
Representative Hannan remarked that Amendments 1, 2, and 4
were all to HB 53, but Amendment 3 was to HB 55.
Co-Chair Josephson agreed.
Representative Hannan asked for verification that Amendment
3 was a simple amendment to HB 55.
Co-Chair Josephson agreed.
Representative Johnson stated her understanding the
committee would hear public testimony followed by the first
three amendments.
Co-Chair Josephson clarified that the committee had already
taken public testimony [on HB 56].
Representative Johnson thought the committee would take up
the first three amendments and hear about the fourth but
take no action on the fourth during the current meeting.
Co-Chair Josephson explained that the idea was to orient
committee members to the topics in the [first four
amendments]. His staff and the Legislative Finance Division
(LFD) were prepared to help explain the amendments. He
added that the committee would also talk about ways "to
amend this" that were not inconsistent with an email
members received the previous evening. He relayed they
would be considering amendments in the current meeting
first by explanation and orientation. He believed two were
perfunctory, but others may disagree. The committee may or
may not adopt any amendments in the current meeting. The
committee would hear member amendments beginning the
following day.
1:47:51 PM
Co-Chair Josephson asked his staff to explain Amendment 1.
ALEXANDER SCHROEDER, STAFF, REPRESENTATIVE ANDY JOSEPHSON,
reviewed Amendment 1. The amendment included an 11 percent
cost of living adjustment for the Alaska Correctional
Officers Association salary adjustments in the amount of
$14,393,500; a salary adjustment for the Teacher's
Education Association of Mt. Edgcumbe in the amount of
$167,500; and a salary adjustment for United Academics
members in the amount of $3,176,600. The overall cost for
the salary adjustments was $17,737,600 in unrestricted
general funds (UGF).
1:48:59 PM
Representative Stapp thought it looked like fairly standard
contractual adjustments to collective bargaining
agreements. He thought the agreements had concluded at or
close to the end of the previous year. He asked for
verification that "this was coming in one of the governor's
amend."
Mr. Schroeder agreed.
Representative Stapp wondered why the funding had not been
included in the governor's budget at the beginning of the
year if the contract was complete the previous year. He
supported the amendment, which he viewed as perfunctory.
Mr. Schroeder deferred the question to LFD.
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
replied that the three contract negotiations were concluded
in the current year. The statutory deadline was day 60 [of
session] and the contracts had concluded within that
timeframe. He elaborated that the correctional officers'
contract date expired at the beginning of the current
fiscal year as an agreement had not been reached by that
time. The agreement had been reached through arbitration in
January, which was the reason it was not part of the
governor's original budget.
1:50:47 PM
Representative Stapp WITHDREW the OBJECTION.
There being NO further OBJECTION, Amendment 1 was ADOPTED.
1:51:07 PM
Co-Chair Josephson MOVED to ADOPT Amendment 2 (copy on
file):
Amendment 2 - HB 53 and HB 55 Sec. 1 Wordage
Amendments
Agency: Department of Commerce, Community and Economic
Development
Economic Development
Intent
It is the intent of the legislature that these
positions be used to promote business, economic, and
job development in emerging sectors, facilitate
engagement between the State and new businesses, and
engage in other work that supports innovation and
entrepreneurship in Alaska. It is the further intent
of the legislature that the Department provide a
report on December 20, 2025 to the Co-chairs of the
Finance committees and to the Legislative Finance
Division containing information on these positions,
including Position Control Number, job description,
recruitment status, and a status report on any
completed or in-progress initiatives undertaken by the
holders of these positions.
Alaska Oil and Gas Conservation Commission
Intent
It is the intent of the legislature that the Alaska
Oil and Gas Conservation Commission prepare and submit
a report to the Co-chairs of the Finance committees
and the Legislative Finance Division by December 20,
2025. The report shall include a timeline that
includes key goals and milestones for the carbon
storage project and an estimated date of the revenue
realization point.
Representative Stapp OBJECTED for discussion.
Mr. Schroeder explained that the amendment included all the
subcommittee intent and conditional language. The amendment
also included intent language for the Alaska Permanent Fund
Corporation (APFC) related to the Anchorage office.
Representative Johnson remarked that subcommittees had been
given instruction against adding intent language. She
observed the amendment pertained to intent language and she
thought it was unusual. She asked why there was intent
language through a subcommittee process.
Co-Chair Josephson explained that the subcommittees were
allowed to recommend intent language, but it was not
adopted through the reports. He did not know how including
the language in the amendment was different than adopting
it through the reports. He did not know whether it was
cultural. Essentially, the subcommittees were not given the
jurisdiction to dispose of matters through intent language
in their subcommittee reports.
Mr. Schroeder added that part of the reason the intent
language had not been folded in was to give LFD more time
to look over any of the recommendations and clarify the
language in a way that would capture the intent of the
recommendations. The language was coming in the form of an
amendment rather than being a part of the committee
substitute (CS) itself.
Co-Chair Josephson added, "Or, in fact, the subcommittee
reports."
Mr. Schroeder agreed.
Co-Chair Josephson would not ask for a vote on the
amendment during the current meeting. He suggested that
committee members may have amendments. For example, there
were strong feelings about the Alaska Permanent Fund
Corporation (APFC) opening an Anchorage office. He noted it
was a matter taken up in the amendment packet.
Representative Stapp asked for the highlights of the
amendment.
Co-Chair Josephson asked his staff to review the amendment.
Mr. Schroeder asked if there were specific items the
committee was interested in.
Representative Stapp asked about intent language for
Medicaid Services modeling on page 6 [of the amendment
detail] and a temporary increment on page 7.
Co-Chair Josephson asked Mr. Painter to come to the table.
1:55:46 PM
Mr. Painter asked for a repeat of the question.
Representative Stapp asked about intent language on page 6
regarding childcare benefits. He read the proposed intent
language:
It is the intent of the legislature that child care
funding be used to expand capacity in the child care
sector, including through direct support for the
workforce, innovation grants including but not limited
to expansion of facilities, and matching funds to
leverage local contributions.
Representative Stapp understood the idea but asked about
the practicality. He wondered if it meant the state was
giving the money to a third party for distribution or if
the distribution would occur directly through the
Department of Commerce, Community and Economic Development
(DCCED).
Mr. Painter believed it was more of a policy question.
Representative Stapp looked at a Medicaid Services item on
page 7 pertaining to a temporary increment for clinical
behavioral health services. He knew the department was
creating its rebasing methodology regarding behavioral
health and looking to go through an amend process. He was
uncertain whether it fell under the existing 1115 waiver.
He asked about the mechanics behind a temporary increment
in Medicaid Services. He wondered if they would have to
amend the state plan temporarily for two years in order to
do so.
Mr. Painter believed it did not require a plan amendment
because it was general funds, but he would follow up.
Representative Bynum requested to take Amendment 2 up the
following day.
Co-Chair Josephson WITHDREW the motion to adopt Amendment 2
for consideration the following day.
1:58:52 PM
Co-Chair Josephson MOVED to ADOPT Amendment 3, 34-
GH1459\I.1 (Marx, 3/22/25) (copy on file):
Page 14, line 21, following "unit":
Insert";
(5) Alaska Correctional Officers Association,
representing the correctional officers unit;
(6) Teachers' Education Association of Mt.
Edgecumbe, representing the teachers of Mt. Edgecumbe
High School"
Page 14, line 29, following "Association/UAW":
Insert ";
(4) United Academics - American Association of
University Professors, American Federation of
Teachers"
Representative Stapp OBJECTED.
Mr. Schroeder explained the amendment included language for
the collective bargaining units and granted the authority
in the language section to appropriate the salary
adjustments to the numbers section.
Co-Chair Josephson asked if the items would be embedded in
HB 53 and HB 55.
Mr. Schroeder agreed.
Representative Stapp stated that mechanically he did not
understand. He thought the amendment should be Amendment 1
to HB 56 [HB 55]. He believed the amendment needed to be
adopted separately in each of the bills.
2:00:20 PM
Mr. Painter clarified that it was typical for the committee
to hear the operating budget bills and amendments to the
two bills simultaneously. He explained that many amendments
had impacts on both bills. It was possible to use mental
health funds and non-mental health funds in one amendment.
He elaborated that each bill had an independent language
section, and it was unusual to have language amendments to
the mental health bill. He noted that language amendments
to the mental health bill were typically done in a CS, but
under the current circumstance it was being done through an
amendment. He noted that amendments to the numbers section
typically touched both bills.
Representative Stapp asked how to vote on one amendment
that was adopted in two bills.
Mr. Painter explained that Amendment 3 only touched HB 55.
The matching language was included on pages 25 and 26 of
Amendment 4 for HB 53.
Representative Stapp was amenable to the process as long as
Mr. Painter indicated it was doable.
2:01:50 PM
Representative Hannan asked for clarity about Amendment 3
pertaining to HB 55. She stated her understanding that the
amendment did not repeat the dollar values, it just
affirmed that the legislature was funding the contracts
funded in HB 53 in Amendment 1.
Mr. Painter answered that the situation was a little
unusual in that there was not funding for the specific
bargaining units in HB 55. Typically, the goal was to
include same list of bargaining contracts in the two bills
regardless of whether there was specific funding in either
bill to avoid the error of missing one in one of the bills.
The funding was contained in the numbers section. The
amendment added the unions to the list of bargaining units
that the funding in the first section applied to. He stated
it was a little odd in that there was not funding in the
mental health bill for the item but keeping the sections
together reduced errors.
Representative Stapp WITHDREW the OBJECTION.
There being NO further OBJECTION, Amendment 3 was ADOPTED.
2:03:19 PM
Co-Chair Josephson MOVED to ADOPT Amendment 4, 34-
GH1462\I.1 (Marx, 3/21/25) [note: due to the length of the
amendment it is not included here. See copy on file for
detail].
Representative Stapp OBJECTED.
Co-Chair Josephson asked for an explanation of the
amendment.
Mr. Schroeder relayed that he would refer to page and line
numbers in the inline [redline] document provided in
members' packets (copy on file).
Co-Chair Josephson asked for verification that the document
was labeled Amendment 4 backup.
Mr. Schroeder noted that it may be marked as HB 53 language
inline [document was labeled "RedlineLanguage Section
(backup to Amendment 4)].
2:03:57 PM
Mr. Schroeder began on page 59, lines 1 through 9 of the
redline document, which deleted Alaska Seafood Marketing
Institute (ASMI) funding, which had been moved to the fast
track supplemental budget. Additionally, the Alaska Energy
Authority (AEA) had been moved from the language section to
the numbers section. He moved to page 61, lines 4 through
13 [Section 8, subsection (b)] that added a new subsection
under the Alaska Industrial Development and Export
Authority (AIDEA). He explained that like the Alaska
Housing Finance Corporation (AHFC), the subsection
appropriated AIDEA's interest earnings, loan fees, and
other receipts to AIDEA and allowed the corporation to
transfer money between its funds. There was no material
difference to AIDEA's receipt authority. He detailed that
it was standard appropriation language giving a state
agency the legislative approval for its funds to be
appropriated.
Co-Chair Josephson asked members to ask questions if
needed.
Representative Johnson referred to redacted language and
asked for an explanation.
Mr. Schroeder answered that the redaction pertained to the
APFC section. He explained that the amendment did not
pertain to the specific language; therefore, it had been
removed from the document.
Representative Johnson asked what it addressed.
Mr. Schroeder responded that the language pertained to the
APFC section in the language section of the bill and
addressed how the money was appropriated.
Co-Chair Josephson asked for verification that the
redaction meant the language remained in CS1.
Mr. Schroeder agreed.
Mr. Schroeder continued his review of Amendment 4. He moved
to page 63, line 15. The amendment modified the section
[Section 11, subsection (b)(1)] to refer to Department of
Law (DOL) rather than Department of Administration (DOA).
He explained it was a technical fix in accordance with the
administrative order in 2024 that transferred labor
relations functions to DOL.
Co-Chair Josephson noted it was a topic that had been
discussed extensively in numerous committees.
Mr. Schroeder continued his review of Amendment 4. He
pointed to page 63, lines 28-29 [Section 11, subsection
(b)(3)]. The language requested that the administration
notify LFD if a letter of agreement was terminated before
the termination date specified in the letter of agreement.
2:07:46 PM
Co-Chair Josephson stated it was something noted by
Representative Hannan earlier that made its way into the
amendment.
Mr. Schroeder moved to page 66, lines 18-21 [Section 13,
subsection (i)]. A new section was added with an additional
community assistance distribution of $6,666,700. He
elaborated that it would result in a total distribution of
$30 million when added to the distribution based on the
June 30, 2025 balance of the Community Assistance Fund. He
detailed that it was a direct appropriation according to
formula, but instead of going to fund it was directly
appropriated to its purpose. He noted it was based off of
the previous year's budget language.
Mr. Schroeder moved to page 66, lines 18 through 21 that
added a new section with an additional community assistance
distribution of $6,666,700. When added to the distribution
based on the June 30, 2025, balance of the Community
Assistance Fund, the funding would result in a total
distribution of $30 million. He elaborated that it was a
direct appropriation according to the formula, but instead
of going to the fund it would be directly appropriated to
its purpose. The item was based off of FY 25 budget
language. He advanced to page 66, lines 22 through 28,
which added a new section appropriating NRA [National Rifle
Association] license plate funds to a DCCED grant for
scholastic clay target programs. He noted there was similar
language in the operating budget the previous year.
Mr. Schroeder moved to page 67, lines 25 through 31 where a
new section was added with contingency language for a
$1,000 Base Student Allocation (BSA) increase from
statutory formula in the event that HB 69 [separate
legislation that would increase the BSA] did not pass or
passed with a BSA increase under $1,000. The language was
constructed to mirror the budget the previous year.
2:09:17 PM
AT EASE
2:10:23 PM
RECONVENED
Co-Chair Josephson asked Mr. Schroeder to continue his
explanation of Amendment 4.
Representative Bynum asked for a restatement of the
section.
Mr. Schroeder complied. A new section was added on page 67,
lines 25 through 31 with contingency language for a $1,000
BSA increase from statutory formula in the event that HB 69
did not pass or passed with a BSA increase under $1,000.
The language was constructed to mirror the budget the
previous year.
Co-Chair Foster asked for verification it would be a one-
time increment instead of in the base under HB 69.
Mr. Schroeder agreed.
Co-Chair Josephson remarked that in the recent past there
had been one-time funding that mirrored a BSA bill. The
increment in the amendment was one-time funding that
mirrored a current BSA bill that was adopted and passed by
the House 24/16. He added the increment would make up the
difference if HB 69 came in at a lower amount subject to
a veto and would provide one-time funding up to $1,000.
Mr. Schroeder agreed.
Representative Bynum highlighted that HB 69 was in the
Senate and currently included a permanent BSA increase of
$1,000. If for some reason the bill were to be amended to
something lower (e.g., $680), the amendment meant the
additional funding [up to $1,000] would be a one-time
funding increment.
Co-Chair Josephson agreed. He added that districts did not
believe a one-time increment would be as meaningful.
2:13:46 PM
Representative Stapp understood the language section
amendment regarding contingency language for a $1,000 BSA
increase. He thought the money had to be in the numbers
section of the bill under the appropriation to the
foundation formula.
Co-Chair Josephson answered no because there may not be an
appropriation to the foundation formula. He was confident
the $680 [to the BSA] in previous years was in the language
section. He asked Mr. Painter to elaborate.
Mr. Painter answered that typically outside the formula
funding went in the language section because it was an
estimated amount (the student count was not yet known). The
numbers section included a small part of the foundation
formula including federal and other funds. The remaining
funding happened as a fund capitalization in HB 53. He
elaborated that if a substantive bill passed, the amount
"estimated to be" would increase. The amendment would pay
the outside of the formula amount; it was included in the
language section because the actual dollar value needed to
get to a $1,000 BSA increase was not known because the
student count was unknown.
Representative Stapp saw that the additional appropriation
was appropriated from the general fund. He thought there
did not appear to be enough general funds to make the
additions. He asked what to do with a budget that did not
have sufficient general funds to appropriate general funds.
Mr. Painter replied that there was a section for the
Constitutional Budget Reserve (CBR) that called for an
additional draw. He added that similar language could be
added in conference committee. He explained that each body
of the legislature did not have to pass a balanced budget;
it was the entire body of the legislature that was required
to pass a balanced budget.
2:16:17 PM
Mr. Schroeder moved to a new section on page 68, lines 1
through 4 increasing the pupil transportation formula with
an amount of $6,781,200, a 10 percent increase over the
statutory formula, in case HB 76 or an equivalent piece of
legislation modifying the pupil transportation formula did
not pass. He noted it was based off of the prior year's
budget language.
Co-Chair Josephson asked for verification it was one-time
funding.
Mr. Schroeder agreed.
Co-Chair Josephson asked for verification that HB 69 did
not address transportation funding. He noted that he was
receiving visual confirmation that was the case.
Mr. Schroeder responded that he did not have the answer at
present.
Mr. Schroeder moved to a new subsection [Section 21,
subsection (d)] on page 70, line 31 through page 71, line 5
for a $5,000,000 backstop appropriation to the Alaska
Marine Highway System (AMHS) in the event that federal
funds fell short.
Co-Chair Josephson believed the other body was currently
discussing investing $10 million in backstop funding.
Mr. Schroeder replied that he believed the Senate's budget
included a $10 million appropriation.
Co-Chair Josephson remarked that it would be a
conferenceable item.
2:18:29 PM
Mr. Schroeder moved to page 73, line 21 showing an adjusted
debt service from $2,403,900 to $144,127. He explained that
it was a technical adjustment matching FY 24 and prior
language. The change resulted in a savings of $2,259,773
UGF. He detailed that the calculation error was caused by
taking the full amount owed instead of the annual payment
for the debt.
Co-Chair Josephson recognized Representative Elexie Moore
in the room.
Representative Tomaszewski asked what happened to a
committee substitute 2. He thought it seemed they were
doing a lot of work that could have easily been rolled out
into a CS2. He asked why the process was being done in the
current way.
Co-Chair Josephson answered that it was a work product
question. He replied that it was the method that had been
chosen. He relayed that if the amendment was adopted, it
virtually resulted in CS2. He stated the committee was well
into the discussion on the amendment and it would likely
have had the discussion anyway. He thought the discussion
had value. He believed the current process was more
transparent than introducing a CS2.
Representative Tomaszewski thought it would have been
easier and a better process. He believed committee members
were fumbling along to understand the changes.
Co-Chair Josephson replied that he was not seeing a lot of
fumbling along.
2:21:07 PM
Representative Hannan remarked that instructions had been
given for members to make amendments to CS1. She noted that
if the committee were to adopt a CS2 during the current
day, the amendments would be inappropriately drafted. She
noted that an amendment deadline had been given for CS1 not
CS2.
Representative Bynum clarified a CS2 had not been presented
to make amendments on. He stated that there had not been a
CS2 released for review or consideration.
Co-Chair Josephson agreed.
Representative Bynum asked about page 61 for clarity. He
noted there were blackouts [redactions]. He was not certain
whether something was blacked out for a purpose. He had not
seen the particular arrangement on documents other than
things that were blacked out for purposes of
confidentiality. He wanted to ensure it was benign.
2:23:34 PM
Mr. Schroeder replied that page 1, line 5 of the amendment
deleted all of the material between page 55, line 1 through
page 57, line 3 and page 57, line 23 through page 82, line
1. The break in the two sections was the redacted portion.
He explained that the redacted portions were not addressed
in the amendment. The section pertained to APFC. He
detailed that if the amendment were adopted, it would
include the original language from CS1 for APFC.
2:24:31 PM
Representative Stapp asked if Co-Chair Josephson had talked
to Legislative Legal Services about the implications of
adopting numerous language section amendments to the CS and
trying to amend other language section amendments later. He
thought it would create numerous potential problems.
Co-Chair Josephson deferred the question to Mr. Schroeder.
Mr. Schroeder replied that in his conversations with
Legislative Legal, if the amendment were to be adopted and
any other amendments were subsequently adopted, the
subsequent amendments would supersede Amendment 4. He
deferred to Legislative Legal for clarification.
2:26:14 PM
MEGAN WALLACE, CHIEF COUNSEL, LEGISLATIVE LEGAL SERVICES
(via teleconference), responded that if Amendment 4 was
adopted it would substantially impact almost all of the
language section in the bill. She stated that members would
procedurally have a few options. Members could make
amendments to the amendment. Alternatively, it was likely a
member may have a subsequent amendment to CS1 during the
amendment process that impacted the same sections as
Amendment 4. She explained that the impact would be on an
amendment-by-amendment basis with respect to the adoption
of Amendment 4. She elaborated that in the case of language
amendments adding new language that was not in either
amendment, it was clear the new language could be included
because there was no conflicting language. However, if the
amendments conflicted or attempted to amend appropriations
in different amounts those would not be considered
"harmonious." She explained that through Uniform Rule 10,
the drafting manual controlled the drafting of bills and
amendments. The manual specified that if multiple
amendments that were not harmonious were adopted, the last
adopted amendment superseded amendments previously adopted.
She stated it was a little confusing, but not totally
uncommon for a committee to adopt multiple amendments that
were not harmonious. She recommended that if members
offered future amendments on the same subject as Amendment
4, the committee's intent should be clearly stated for the
record.
2:29:58 PM
Representative Stapp found the answer a little confusing.
He asked about a scenario where the language amendments
proposed in the current meeting passed and the following
day he offered amendments, some of which were adopted. He
asked if it was acceptable. He asked for verification that
Ms. Wallace had stated that in the event of a conflict, the
last amendment to be adopted would supersede prior
amendments.
Ms. Wallace replied affirmatively. She noted that the
answer may differ if something very complicated was
presented to the committee. In general, if a language
amendment was adopted after the adoption of Amendment 4,
the second amendment would control if it conflicted with
the language in Amendment 4.
Representative Bynum noted that members currently had staff
working hard to accommodate the amendment deadline. He
remarked that if Amendment 4 was adopted there could be a
case where it created a domino effect where it pushed
things around in the bill. He assumed if there was an
amendment with the same topic and intent, the last
amendment adopted would supersede the prior amendment [in
the case of conflict]. He asked about a scenario where he
had an amendment that pointed to a section that was no
longer in the bill or in addition. He asked how that
situation would be handled.
Ms. Wallace responded to the hypothetical scenario provided
by Representative Bynum. Representative Bynum's amendment
would not necessarily be in conflict with Amendment 4. She
explained that if the amendment required conforming changes
to ensure it was put in the correct location in the bill,
technical changes were generally made through the
engrossment process. She elaborated that the committee
typically gave Legislative Legal the power to make
technical and conforming changes. She noted that even
without that specific language, Legislative Legal would
typically work both amendments into the bill in a way that
they worked together and were not inconsistent with one
another.
2:33:55 PM
Representative Hannan pointed out that all of the
amendments, including the extensive Amendment 4, were to
CS1. She clarified that it would not be a new version of
the bill because some of the amendments had been
considered. She explained it would still be CS1 the
following day when more amendments were offered. She noted
that typically the committee included language [giving
Legislative Legal the ability to make] conforming language
changes. She reiterated that the adoption of Amendment 4
would not make the CS an amended version until the bill was
reported from committee.
2:35:10 PM
Mr. Schroeder continued to review Amendment 4. He addressed
page 73, line 30 that adjusted the debt service from
$460,839 to $26,268. He explained that it was a technical
adjustment matching FY 24 and prior language, reflecting a
savings of $434,571 UGF. The calculation error was caused
by taking the full amount owed instead of the annual
payment for the debt. Page 77, lines 5 through 9 restricted
the Legislative Budget and Audit Committee to address
Revised Programs Legislative (RPL) related to the Alaska
Gasline Development Corporation (AGDC). He noted the
language identical to language in the FY 25 operating
budget.
Co-Chair Josephson asked if the identical language
pertained to AGDC.
Mr. Schroeder answered it was the verbatim AGDC language
from the FY 25 budget.
Mr. Schroeder moved to page 78, lines 9 through 16 that
reduced the Public Education Fund capitalization by
$5,285,600 UGF to accurately reflect statutory amount
necessary when added to the projected balance of the fund.
He noted that a similar adjustment was made in the FY 25
budget.
2:37:33 PM
Mr. Schroeder moved to a new subsection [Section 27,
subsection (n)] on page 82, lines 28 through 30 for
Washington, Wyoming, Alaska, Montana, and Idaho (WWAMI)
Program Partnership repayments. The subsection appropriated
the funds to the Higher Education Investment Fund. The
section was based off of FY 25 language, which was vetoed
by the governor. He turned to page 83, lines 25 through 28
that added collective bargaining agreement salary
adjustments to the Alaska Correctional Officers
Association's and Teacher's Education Association of Mt.
Edgecumbe's. He noted it was a governor's item.
Additionally, page 84 added salary adjustments for United
Academics.
Mr. Schroeder moved to page 86, line 23 through page 87,
line 10 where a special appropriations section was added.
The section included "kicker" language in the event there
was a surplus in revenue for FY 26 up to $700 million. He
detailed that 50 percent would go to energy relief payments
and 50 percent would go to the budget reserve fund.
Co-Chair Josephson referenced the term "kicker" and
explained that in the event of a substantial spike in oil
prices, there would be an addition to the Permanent Fund
Dividend (PFD) in calendar year 2026.
Mr. Schroeder agreed.
Co-Chair Josephson stated that term kicker meant increase.
Representative Galvin stated her understanding that if oil
prices spiked any additional dollars would be split evenly
between the CBR and energy relief. She needed clarity about
the terms.
Mr. Schroeder asked for a repeat of the question.
Representative Galvin highlighted the language at the top
of page 87 pertaining to a one-time energy relief payment.
She noted that Co-Chair Josephson used the word Permanent
Fund. She stated her understanding that PFD recipients
would receive the extra funding in the form of an energy
relief check.
Co-Chair Josephson answered that the funds would be split
up to a certain amount, which he believed was $7 billion in
total revenue.
Co-Chair Josephson asked for his staff Ken Alper to come to
the table to elaborate.
2:41:34 PM
KEN ALPER, STAFF, REPRESENTATIVE ANDY JOSEPHSON, clarified
that the money would not be received in a separate check.
He highlighted that the PFD received in 2024 was $1,702,
which was comprised of about $1,350 for the PFD and ~$300
for an energy relief payment. The structure Amendment 4 was
modeled after what had been done in the past two or three
years. The trigger number was $6.3 billion, which was about
$170 million greater than the spring forecast. He noted
that the formula had been followed in the past
approximately. He explained that the $700 million between
$6.3 billion and up to $7 billion would be split evenly
between the 2026 PFD (roughly $500 per person) and the
Statutory Budget Reserve (SBR). Any funds above $7 billion
would flow automatically to the CBR.
Representative Galvin asked about taxation on the dollars.
She recalled that in the past there had been question about
taxation. She noted that around 20 years back PFD
recipients had received an additional check. She explained
that the energy relief payment had not been taxed. She
asked if any additional check would be considered the same
as a PFD for tax purposes.
Mr. Alper replied that there had been three of the payments
over the years. The first was during the Palin
administration and was an incremental $1,200 and called an
energy bonus. The second one had been received during the
COVID-19 pandemic. He recalled there had been an order from
the Department of Revenue that specified the energy relief
portion would not be taxable. He did not know precisely why
and what the federal tax reason was. He noted that it may
have been specific to something that happened during COVID.
He did not recall any similar language or instruction
pertaining to the $300 energy bonus received in 2024.
2:45:20 PM
Co-Chair Josephson asked if the legislature adopted a 75/25
PFD that it would be more than the PFD paid in 2024.
Mr. Alper answered that the PFD the prior year was based on
the 75/25 structure plus the energy bonus from the prior
year. He elaborated that a 75/25 PFD in 2025 would be
slightly higher estimated at about $1,440; it had been
about $1,350 or $1,360 in 2024. He detailed that the $1,700
total had been a combination of the $1,360 PFD and the
energy bonus passed in 2023. He concluded that a 75/25 PFD
would be smaller than the 2024 combined PFD, but larger
than the appropriated 75/25 amount.
Co-Chair Josephson stated that one could argue it was
nomenclature, but in a technical sense he understood what
Mr. Alper was saying.
Mr. Alper remarked that when the creation of the percent of
market value (POMV) in HB 26 passed in 2018, the first POMV
draw was a bit over $2.7 billion, while six to seven years
later, it was $3.8 billion. There was collective benefit
from the overall growth in the Permanent Fund value;
therefore, 5 percent of the lookback formula was getting a
bit larger every year.
Co-Chair Foster stated that the forecasted oil price for FY
26 was $68 per barrel. He asked what the oil price would
have to be in order for the kicker to take effect.
Mr. Alper replied that the spring forecast for FY 26 was
$68. The current expected total revenue was $6.13 billion.
The revenue would have to be $170 million above the
projected $6.13 billion [in order for the kicker to go into
effect]. He detailed that $1 in the price of oil was in the
$30 million to $40 million range. He estimated that a price
of $73 started getting into the kicker space. The $700
million above the projected revenue would perhaps be
another $15 or so dollars more [above $73 per barrel]. The
money that came to the state between oil prices of $73 and
$88 would go to the supplemental payments.
Representative Bynum remarked that the term energy relief
in no way brought energy relief to all of Alaska. He stated
that the money was only tied to the PFD. He explained that
if the high oil prices occurred, PFD recipients would
receive the additional money. He highlighted that it in no
way relieved residents from the increasing cost of gas and
electricity.
Co-Chair Josephson stated that in other words it was not
full relief.
2:49:12 PM
Representative Johnson remarked that it helped people
offset their energy costs. She relayed that based on her
research, energy relief was taxable.
Mr. Schroeder turned to page 87, lines 11 through 18 that
added CBR language to cover the amount necessary for all FY
26 expenditures.
Representative Stapp asked how much was needed from the CBR
to cover the current budget.
Co-Chair Josephson replied that the amount exceeded $2
billion.
Mr. Painter replied that the answer depended on the capital
budget, which was not currently before the committee. He
detailed that the current CS1 included a statutory PFD of
$2.5 billion matching the governor's proposed operating
budget. He elaborated that including the governor's capital
budget of $294 million, the governor's budget had a deficit
of about $1.65 billion. Adding $250 million in outside the
formula education funding would result in a deficit of
roughly $1.9 billion.
Representative Stapp asked about the logic behind kicker
language of oil prices going up $73 or $86 "in some sort of
fantasy" where there was a 50/50 split [of the funds] and
$2 billion was taken out of the CBR and potentially $300
million was put back in. He asked why the committee would
consider those things. He did not understand the two
language sections. He remarked that on one hand the budget
would do a large CBR draw of $2 billion and on the other
hand the budget specified that if oil price went up in some
legislative fantasy, some of the money might be put back.
Co-Chair Josephson responded that the question illustrated
the dilemma that the House would correct the math error in
order for the budget to balance. He thought there was a
sense amongst the Alaska people that when the state did
well, the people should do well. He observed there was a
tradition or culture of recognizing that sentiment where a
[energy relief] payment had been made to Alaskans several
times and the budget reflected that. He stated it was
unlikely to occur, but it could. He remarked that while
high oil prices had been seen, they typically did not
sustain themselves for 12 months.
Representative Stapp asked about the logic behind removing
the CBR draw language in CS1 and amending it back in. He
highlighted that the CBR draw language existed in the
original budget. He stated there had been many people in
the majority of both bodies who had stated on the record
they would not approve a CBR draw.
Co-Chair Josephson agreed the other body had stated it did
not want a CBR draw other than the supplemental. He
believed the Senate would take up a bill much like HB 56.
He stated that part of the question about whether a CBR
draw was needed was answered by the BSA. He noted it was a
dynamic process.
2:54:37 PM
Representative Stapp stressed that Co-Chair Josephson had
taken out the language from the CS and now he was asking to
put it back in. He wondered why.
Co-Chair Josephson replied that he did not want to get into
discussions he had with the other body.
2:55:19 PM
AT EASE
2:55:44 PM
RECONVENED
Representative Johnson stated she had been shut down
numerous times. She remarked that she was not trying to be
contentious, but there was nothing wrong with having a
robust debate. She thought at some point they needed to
talk about what was going on.
Co-Chair Josephson replied that he had taken his current
st
position on the 21 of January. He asked if he had shut her
down.
Representative Johnson responded that Co-Chair Josephson
had not particularly shut her down, but she had been shut
down as a minority member on the floor and had been told
not to talk about a number of things. She wanted to stand
up for an open process and not having the conversation off
the record.
Co-Chair Josephson answered that the record reflected that
he declined to answer the question [asked by Representative
Stapp prior to the at ease].
Representative Bynum asked for verification that the CBR
language being added in Section 33 was general language put
in place to balance the budget and was not tied to any one
specific thing.
Co-Chair Josephson agreed.
2:57:24 PM
Co-Chair Josephson recognized Representative Bill Elam in
the room.
Representative Tomaszewski asked about a math error that
Co-Chair Josephson had referenced related to the Permanent
Fund. He asked if Co-Chair Josephson had stated the other
body would fix the math error or if there was language in
the amendment to fix the math error.
Co-Chair Josephson replied that the budget delivered by the
governor was not balanced. He relayed that in the coming
days the committee would have a robust discussion to put
the budget in a position where the CBR did not have to be
more than halved.
2:58:31 PM
Representative Galvin looked forward to the discussion and
believed there were difficult times ahead. She stressed
that the legislature had been handed a budget that was over
$1.5 billion in the hole. She remarked that money had been
added to the budget the subcommittee she chaired, and she
suspected there would be talk about cutting it out. She
noted the committee could look into governor cuts. She
thought everything should be on the table. She thanked the
Co-Chair Josephson for creating the space to have the
discussion. She believed it was what the public was
expecting. She highlighted that $1.6 billion was a
substantial amount of money, which would require a draw.
She stated that it was not possible to cut $1.6 billion.
3:00:25 PM
Mr. Schroeder completed his explanation of Amendment 4. The
remaining items were technical in nature. Page 87, lines 19
through 21 added lapse of appropriations language. Lines 22
through 29 adjusted retroactivity language to reflect new
section references. Page 88, lines 9 through 11 clarified
that the pupil transportation increase in Section 14(g) of
the bill was contingent upon failure of House Bill 76 or a
similar piece of legislation.
Representative Bynum looked at the language on page 88 and
noted it was similar to language discussed earlier related
to BSA.
Mr. Schroeder replied that the language was related to
pupil transportation increase.
Representative Bynum stated his understanding it was the
same effect but a different funding source.
Mr. Schroeder agreed.
Representative Bynum remarked that the committee had just
reviewed the language section of the budget and the section
had implications to the overall budget. He remarked that
there were some reductions and some adds. He asked if there
would be a spreadsheet summary showing the monetary impact
of the bill.
Co-Chair Josephson answered that he could try to provide
something. Monetary changes were identified when the
committee adopted CS1. He did not know whether LFD would be
able to produce the number because of the dynamic position.
He guessed LFD would be able to do so. He explained that if
the amendment was adopted it would spend about $250 million
more on public school and a little more including [pupil]
transportation and there were some savings identified. He
asked to hear from Mr. Painter.
3:03:47 PM
Mr. Painter replied that he could provide the number.
Representative Bynum replied that it would help to
understand the numbers throughout the process. He referred
to language that had been included about the BSA with
reference to HB 69. He pointed out that HB 69 had
additional spend items that were not included in the
amendment.
Co-Chair Josephson responded affirmatively. He had not seen
whether the Senate Education Committee had adopted a CS,
but to his knowledge, the statement by Representative Bynum
was accurate. He stated it was $22 million accurate.
Representative Bynum asked if it would be possible to
financial implication of HB 69 from LFD. He noted that if
HB 69 were to pass and conforming changes to the budget
were needed, he did not know what the numbers were.
Co-Chair Josephson answered it was dynamic. He remarked
that they would know with finality at the end of session.
He asked for comment from Mr. Painter.
Mr. Painter replied that the Department of Education and
Early Development prepared fiscal notes that were delivered
to the Senate Education Committee for the version [of HB
69] that passed the House. The cost was roughly $22
million. He did not recall the precise number in addition
to the BSA change. The fiscal notes were posted on BASIS
and in the LFD fiscal note system.
Representative Bynum asked if the fiscal notes were
provided in the Senate Education Committee.
Mr. Painter agreed.
3:05:58 PM
Representative Bynum stated that one of the big issues for
discussion was meeting the funding gap. There was a lot of
conversation happening about what would happen with the
education bill and funding for education and the PFD. A big
question mark was the capital budget. He noted there were
not any new numbers showing adds to the capital budget. He
wondered what the impact of the CBR language in the CS1
would be on overall changes in the capital budget.
Co-Chair Josephson answered that CS1 said that the money
was not designated for any purpose other than funding the
whole of the budgets. Therefore, with the CBR language in
CS1 and affirmative votes, the capital budget would be
fully funded unless it was more than $2.7 billion.
3:08:03 PM
Mr. Painter agreed. The CBR language in Amendment 4 applied
to appropriations that took effect in FY 26 and did not
specify operating or capital appropriations.
Representative Bynum stated his understanding it covered
all of the outstanding budget bills.
Co-Chair Josephson replied affirmatively. He clarified the
amendment process. He explained that members could offer
standalone language amendments to CS1 or conceptual
amendments to Amendment 4.
3:09:04 PM
AT EASE
3:09:38 PM
RECONVENED
Co-Chair Josephson discussed the amendment process
pertaining to Amendment 4.
Representative Bynum asked for clarification that the 5:00
p.m. amendment deadline was for standalone amendments. He
asked for verification that any conceptual amendments to
Amendment 4 should be held onto until offered.
Co-Chair Josephson stated amendments were still due at 5:00
p.m., but they could be offered as a conceptual amendment
and Legislative Legal could help draft them.
Co-Chair Josephson reviewed the schedule for the following
meeting.
HB 53 was HEARD and HELD in committee for further
consideration.
HB 55 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 53 Amendment #1 - Sec. 1 Numbers Amendments - GovAmd 3-13 SalAdjs 032525 .pdf |
HFIN 3/25/2025 1:30:00 PM |
HB 53 HB 55 |
| HB 53 v. I Language Section Amendment 4 Description Backup 032525.pdf |
HFIN 3/25/2025 1:30:00 PM |
HB 53 HB 55 |
| HB53 Amendment #4 - Language 032525 .pdf |
HFIN 3/25/2025 1:30:00 PM |
HB 53 HB 55 |
| HB53 and 55 Amendment #2 - - Wordage 032525 .pdf |
HFIN 3/25/2025 1:30:00 PM |
HB 53 HB 55 |
| HB55 Amendment #3 - Language 032525.pdf |
HFIN 3/25/2025 1:30:00 PM |
HB 55 |
| HB 53 redline language amendment 4 32525C2r (1).pdf |
HFIN 3/25/2025 1:30:00 PM |
HB 53 |
| HB 56 Public Testimony Rec'd by 032525.pdf |
HFIN 3/25/2025 1:30:00 PM |
HB 56 |