Legislature(2025 - 2026)ADAMS 519

04/02/2025 01:30 PM House FINANCE

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Audio Topic
01:37:26 PM Start
01:38:31 PM Presentation: Tiers & Unfunded Liability
03:57:37 PM HB53 || HB55
03:57:40 PM Amendments
05:52:08 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 78 RETIREMENT SYSTEMS; DEFINED BENEFIT OPT. TELECONFERENCED
Heard & Held
+ Presentations: TELECONFERENCED
-TIERS & Unfunded Liability by Department of
Administration
-Alaska Municipal League by Nils Andreassen,
Executive Director
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 53 APPROP: OPERATING BUDGET; CAP; SUPP TELECONFERENCED
Heard & Held
+= HB 55 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
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."                                                                                                        
                                                                                                                                
3:57:37 PM                                                                                                                    
                                                                                                                                
^AMENDMENTS                                                                                                                   
                                                                                                                                
3:57:40 PM                                                                                                                    
                                                                                                                                
Co-Chair  Josephson   relayed  that  the   committee  rolled                                                                    
amendments  94 through  96 to  the bottom  of the  amendment                                                                    
process.  He  encouraged  members  to  offer  any  remaining                                                                    
amendments they  may have. He  discussed his intent  for the                                                                    
remainder of the meeting.                                                                                                       
                                                                                                                                
4:00:11 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:01:40 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Josephson asked if there were members who wanted                                                                       
to offer amendments.                                                                                                            
                                                                                                                                
Representative Stapp MOVED to ADOPT Amendment 42 (copy on                                                                       
file):                                                                                                                          
                                                                                                                                
     Agency:   Corrections                                                                                                      
     Appropriation: Administration and Support                                                                                  
     Allocation:    Office of the Commissioner                                                                                  
                                                                                                                                
     Transaction Details                                                                                                        
     Title:    Zero-Based Budgeting for Agency                                                                                  
                                                                                                                                
     Wordage Type: Intent                                                                                                       
     Linkage: Agency - Corrections                                                                                              
                                                                                                                                
     Wordage                                                                                                                    
     It  is   the  intent   of  the  legislature   that  the                                                                    
     Commissioner submit  a report  by December 20,  2025 to                                                                    
     the  Co-chairs of  the Finance  committees  and to  the                                                                    
     Legislative Finance  Division that encompasses  a Zero-                                                                    
     Based Budget.  The report must include  an analysis and                                                                    
     justification for every position and expense.                                                                              
                                                                                                                                
     Explanation                                                                                                                
     During difficult fiscal times,  it is necessary for the                                                                    
     Legislature to look  at the entire budget,  down to the                                                                    
     minute details,  in search of  government efficiencies.                                                                    
     Zero-Based budgeting,  where a department  must justify                                                                    
     all  expenses from  zero,  improves accountability  and                                                                    
     optimizes  cost  management.  Recognizing that  such  a                                                                    
     dramatic shift in how we  prepare our budget within one                                                                    
     year  would  cause  significant issues,  this  language                                                                    
     provides for the Department of  Corrections to serve as                                                                    
     a pilot for this style of budgeting.                                                                                       
                                                                                                                                
Co-Chair Josephson OBJECTED for discussion.                                                                                     
                                                                                                                                
Representative Stapp explained  the amendment. The amendment                                                                    
included intent language that  would direct the commissioner                                                                    
of the  Department of Corrections  (DOC) to submit  a report                                                                    
by  December 20,  2025, to  the finance  committees and  the                                                                    
Legislative Finance Division (LFD)  that encompassed a zero-                                                                    
based budget. The  objective was to get a  handle on general                                                                    
fund expenses. He stated it  was getting very challenging to                                                                    
see discrepancies  in how budgeting  was done  via baseline.                                                                    
He elaborated  that requiring a department  or RDU component                                                                    
to  come before  the  finance committee  or subcommittee  to                                                                    
justify  its  expenses  from  zero   would  be  helpful  for                                                                    
legislature to understand  where the money went  and what it                                                                    
did.   He  asserted   that  zero-based   budgeting  improved                                                                    
accountability and optimized  cost management. He recognized                                                                    
it was  probably unrealistic to  transition the  entirety of                                                                    
the state's budget over to  a zero-based process. He thought                                                                    
DOC was too large to attempt  to make the change in a single                                                                    
year, but  he thought the  committee may  be able to  have a                                                                    
discussion  about  finding  an   RDU  component  or  another                                                                    
department for zero based budgeting.                                                                                            
                                                                                                                                
Representative  Hannan opposed  the amendment.  She believed                                                                    
that out of all the departments,  DOC was least likely to be                                                                    
able  to  predict its  costs.  She  stated  that DOC  was  a                                                                    
downstream  agency. She  elaborated that  if the  department                                                                    
went  to  zero  based  budgeting at  the  beginning  of  the                                                                    
current   year  and   started  with   no   inmates  and   no                                                                    
programming, it  would have  to specify  who it  expected to                                                                    
get, in what condition, for  how long, and what services the                                                                    
individuals  needed.  Hypothetically, the  department  could                                                                    
say  it expected  zero sex  offenders, zero  inmates in  for                                                                    
lifetime  sentences,  and  no  inmates  in  need  of  kidney                                                                    
dialysis;   however,   instead   they   received   medically                                                                    
complicated long-term  inmates. Yet the department  had only                                                                    
budgeted  for short-term  offenders  with minimum  security.                                                                    
She  believed that  due to  the nature  of DOC,  it was  the                                                                    
least  probable  to succeed  at  zero  based budgeting.  She                                                                    
thought the budgets would be very inaccurate.                                                                                   
                                                                                                                                
4:05:14 PM                                                                                                                    
                                                                                                                                
Representative  Johnson  thought  it   could  be  done.  She                                                                    
acknowledged  it would  never  be specific  and 100  percent                                                                    
accurate. She stated that was  not the point of the process,                                                                    
the point was  to break out where the  actual costs resided.                                                                    
She  highlighted   that  the  DOC  budget   was  continually                                                                    
increasing and  had large  supplementals. She  stressed that                                                                    
the legislature needed  to get a handle on  the reason costs                                                                    
were  continuing  to  increase.  She  did  not  believe  the                                                                    
increases  were  aligned with  the  number  of inmates.  She                                                                    
thought there was  something else that appeared  to be going                                                                    
on, which likely had to  do with management. She believed an                                                                    
honest try to begin the  process and provide the legislature                                                                    
with a report would  be a good way to start  to get a handle                                                                    
on the situation. She stated  that the legislature had to do                                                                    
some management and  oversight of the budget  at some point.                                                                    
She supported the amendment.                                                                                                    
                                                                                                                                
Representative  Bynum  supported  the amendment.  He  stated                                                                    
that  after talking  with the  legislative finance  team, he                                                                    
understood there were things that  could be done in addition                                                                    
to  zero-based  budgeting  to help  the  legislature  get  a                                                                    
better handle  on what was occurring  throughout departments                                                                    
and divisions.  He highlighted his experience  as a previous                                                                    
utility director  and relayed  that it  was possible  to use                                                                    
zero-based  budgeting with  uncertainty. For  example, there                                                                    
were  times  in a  utility  where  it  was not  possible  to                                                                    
predict  the   cost  of  diesel  fuel,   disasters,  copper,                                                                    
shortfalls in  labor, and  more. He  stated there  were many                                                                    
challenges  running   a  utility,   just  like   there  were                                                                    
challenges  running  DOC.  He  explained  that  it  required                                                                    
quantifying  the anticipated  unknowns and  budgeting around                                                                    
them. He  furthered that  it would  mean a  department would                                                                    
identify   items  to   the   legislature  and   accompanying                                                                    
assumptions  used to  come up  with a  budgetary number.  He                                                                    
thought DOC  had the ability to  do the work. He  added that                                                                    
the department should  know what its costs  were. He thought                                                                    
the  exercise  would   be  very  helpful  for   all  of  the                                                                    
departments to undertake.                                                                                                       
                                                                                                                                
4:08:27 PM                                                                                                                    
                                                                                                                                
Co-Chair Josephson  asked Mr.  Painter with  the Legislative                                                                    
Finance  Division (LFD)  to join  the committee.  He thought                                                                    
DOC  would start  with the  fact it  had a  given number  of                                                                    
prisoners and  there were laws  about how  many correctional                                                                    
officers  were needed  and collective  bargaining agreements                                                                    
to honor.  Additionally, DOC had  to heat the  prisons, feed                                                                    
inmates, and provide  them with dental and  medical care. He                                                                    
referred  to the  Cleary decision  [from the  Alaska Supreme                                                                    
Court] related  to prisoners' rights.  He thought that  if a                                                                    
department  went to  the bottom  of its  budget, the  budget                                                                    
would come right back up with many mandatory requirements.                                                                      
                                                                                                                                
ALEXEI  PAINTER,  DIRECTOR,  LEGISLATIVE  FINANCE  DIVISION,                                                                    
answered that in  a zero based exercise,  a department would                                                                    
have  to label  its constraints.  Some constraints  included                                                                    
collective   bargaining   contracts  and   other   statutory                                                                    
requirements. He remarked that they  may end up in a similar                                                                    
place. He  believed the intent  of zero-based  budgeting was                                                                    
that a  department evaluate each expenditure  and justify it                                                                    
to  the legislature  even if  they already  had reasons  for                                                                    
things. He  noted that  it was  a different  way to  look at                                                                    
budgets.  He stated  that Alaska  generally had  incremental                                                                    
budgeting for  the operating budget, and  the capital budget                                                                    
was essentially a zero-based budget.  He was not certain the                                                                    
result would  come to a different  place, but it would  be a                                                                    
different lens.                                                                                                                 
                                                                                                                                
Co-Chair  Josephson asked  if Mr.  Painter had  seen similar                                                                    
intent language in the budget previously.                                                                                       
                                                                                                                                
Mr. Painter  replied that he  could not think of  an example                                                                    
of zero-based budgeting language in the budget in the past.                                                                     
                                                                                                                                
Representative  Tomaszewski  supported   the  amendment.  He                                                                    
thought  it was  the legislature's  fiduciary responsibility                                                                    
to understand  what the departments  were doing.  He thought                                                                    
it was  a great first  step in  the process. He  believed it                                                                    
could and should be done.  He thought the legislature should                                                                    
be  looking  into  zero-based budgeting  tactics  for  other                                                                    
agencies in the future.                                                                                                         
                                                                                                                                
4:11:36 PM                                                                                                                    
                                                                                                                                
Representative Allard  supported the amendment.  She likened                                                                    
the intent language  to a forced audit and  thought it would                                                                    
provide  true  transparency.  She  thought  all  departments                                                                    
should use zero-based budgeting.                                                                                                
                                                                                                                                
4:11:52 PM                                                                                                                    
                                                                                                                                
Representative  Galvin asked  if the  exercise would  retire                                                                    
time or  funds on the  department's behalf. She  wondered if                                                                    
departments would  have to hire  someone to help  guide them                                                                    
through the process of compiling  a report to provide to the                                                                    
legislature.                                                                                                                    
                                                                                                                                
Mr. Painter answered  that it would be up  to the department                                                                    
to  determine. He  elaborated  that  departments had  budget                                                                    
staff  and the  Office of  Management and  Budget (OMB)  had                                                                    
staff. He  did not know  if that  would be sufficient  or if                                                                    
departments would need to contract out or shift resources.                                                                      
                                                                                                                                
Representative Johnson  asked if  Mr. Painter knew  of other                                                                    
states doing zero based budgeting.                                                                                              
                                                                                                                                
Mr. Painter  responded that  he was  not familiar  with what                                                                    
other states did.  He relayed that the  Alaska Mental Health                                                                    
Trust  Authority  (AMHTA)   used  zero-based  budgeting.  He                                                                    
elaborated that  AMHTA's increments  were all  temporary and                                                                    
the agency did not have anything in the base budget.                                                                            
                                                                                                                                
Representative  Johnson  hoped  zero-based budgeting  was  a                                                                    
good way for  the legislature to figure out  where the costs                                                                    
resided and  to look at the  budget in a different  way. She                                                                    
asked Mr.  Painter if he had  other suggestions on a  way to                                                                    
get  to the  numbers  if zero-based  budgeting  was not  the                                                                    
answer.                                                                                                                         
                                                                                                                                
4:14:28 PM                                                                                                                    
                                                                                                                                
Mr. Painter replied that there  were a few other approaches,                                                                    
specifically related to DOC, which he  was aware of due to a                                                                    
bill  introduced   the  previous  session  in   Florida.  He                                                                    
explained that  Florida's version  of OMB and  LFD conducted                                                                    
joint   forecasts   for    some   items   including   prison                                                                    
populations.  He noted  that there  was not  a lot  of joint                                                                    
forecasting  done  in  Alaska.   Other  states  had  varying                                                                    
degrees of the practice used  in Florida. He noted there had                                                                    
been intent  language in  the DOC  budget the  previous year                                                                    
for  DOC to  work on  projections cooperatively  between the                                                                    
branches, but that  did not really occur. He  noted it could                                                                    
work, but due to turnover within  DOC, it had been unable to                                                                    
do so in the past year.                                                                                                         
                                                                                                                                
Representative   Johnson  stated   her  understanding   that                                                                    
Florida, Texas, and possibly one  other state did zero-based                                                                    
budgeting.  She remarked  that the  Texas budget  had to  be                                                                    
large. She  highlighted that Alaska  had a lot  of vacancies                                                                    
and  different things  where the  legislature  did not  know                                                                    
where the  money was being  spent. She pointed out  that the                                                                    
DOC budget  was high and  continuing to grow.  She supported                                                                    
the amendment in order for  legislators to get their eyes on                                                                    
the budgets and  to get a sense they were  adhering to their                                                                    
constitutional responsibility.                                                                                                  
                                                                                                                                
Representative Bynum stated another  valid reason to support                                                                    
the amendment  was to  ask the  department to  undertake the                                                                    
exercise  and   talk  about  what   it  was  doing   in  its                                                                    
expenditures.  The alternative  was to  offer amendments  in                                                                    
committee to take large cuts  to the department's budget and                                                                    
to  hear  from the  department  later  about why  it  really                                                                    
needed the funds. For example,  the budget for some of DOC's                                                                    
facilities  had grown  by  nearly 30  percent  since FY  21,                                                                    
despite  the addition  of no  new personnel.  He thought  it                                                                    
begged  the question  about what  was actually  taking place                                                                    
within   the  department.   He  wanted   to  have   a  great                                                                    
relationship  with  the departments  and  did  not want  his                                                                    
support  for   the  amendment  to  indicate   otherwise.  As                                                                    
appropriators, he  believed legislators  needed to  have all                                                                    
of  the  information  available.  He did  not  have  a  good                                                                    
understanding of  what the  departments were  actually doing                                                                    
with their  budgets because  of how  the budgets  were being                                                                    
passed from one  year to the next. He compared  it to a game                                                                    
of  telephone. He  clarified that  he  was not  in favor  of                                                                    
doing zero-based  budgeting annually because it  was a heavy                                                                    
lift.  He thought  it should  be done  regularly or  through                                                                    
performance  audits,  which  had  to  be  requested  by  the                                                                    
legislature.                                                                                                                    
                                                                                                                                
4:18:45 PM                                                                                                                    
                                                                                                                                
Representative Stapp  provided wrap up on  the amendment. He                                                                    
appreciated the  comments by  committee members.  He relayed                                                                    
that several  states including  Georgia, Florida,  and Texas                                                                    
used  zero-based budgeting.  He underscored  that the  Texas                                                                    
budget was $321.3  billion. He was proposing  a much smaller                                                                    
version. He  remarked that legislators were  frequently told                                                                    
by  educators that  the legislature  had not  made the  same                                                                    
increases  in  the  education budget,  but  the  DOC  budget                                                                    
continued to  grow exponentially. He  noted that one  of the                                                                    
committee  members mentioned  the  DOC budget  had grown  30                                                                    
percent in the past handful of  years. He stated that if the                                                                    
expenses were  justified, the legislature  had to  pay them.                                                                    
He did not know exactly  why DOC's numbers continued to rise                                                                    
when  the  prison  population  went   down.  He  noted  that                                                                    
Representative   Hannan    had   highlighted    there   were                                                                    
constitutional obligations  and fixed costs  associated with                                                                    
prisoners  and  he did  not  believe  the legislature  could                                                                    
spend any  time on  those items.  He agreed  the legislature                                                                    
needed   to   pay   collective  bargaining   agreements   to                                                                    
employees. He  recognized there  may be  a valid  reason for                                                                    
the expenses,  but he wanted to  know where the rest  of the                                                                    
money was going because it  did not all go to constitutional                                                                    
obligations.                                                                                                                    
                                                                                                                                
Co-Chair Josephson MAINTAINED the OBJECTION.                                                                                    
                                                                                                                                
A roll call vote was taken  on the motion to adopt Amendment                                                                    
42.                                                                                                                             
                                                                                                                                
IN FAVOR: Stapp, Allard, Tomaszewski, Bynum, Johnson                                                                            
OPPOSED: Jimmie, Hannan, Galvin, Schrage, Foster, Josephson                                                                     
                                                                                                                                
The MOTION to adopt Amendment 42 FAILED (5/6).                                                                                  
                                                                                                                                
4:21:17 PM                                                                                                                    
                                                                                                                                
Representative Stapp  MOVED to  ADOPT Amendment 18  (copy on                                                                    
file):                                                                                                                          
                                                                                                                                
     Agency:   Administration                                                                                                   
     Appropriation: Office of Information Tech                                                                                  
     Allocation:    Chief Information Officer                                                                                   
                                                                                                                                
     Transaction Details                                                                                                        
     Title:    Utilization  of AI  for Zero-Based  Budgeting                                                                    
     Wordage Type: Intent                                                                                                       
     Linkage: Agency - Administration                                                                                           
                                                                                                                                
     Wordage                                                                                                                    
     It is  the intent  of the  legislature that  the agency                                                                    
     utilize  Artificial Intelligence  technology to  assist                                                                    
     with Zero-Based Budgeting principles.                                                                                      
                                                                                                                                
     Explanation                                                                                                                
     During difficult fiscal times,  it is necessary for the                                                                    
     Legislature to look  at the entire budget,  down to the                                                                    
     minute details,  in search of  government efficiencies.                                                                    
     Zero-Based budgeting,  where a department  must justify                                                                    
     all  expenses from  zero,  improves accountability  and                                                                    
     optimizes cost management.                                                                                                 
                                                                                                                                
     Agency:   Administration                                                                                                   
     Appropriation: Office of Information Tech                                                                                  
     Allocation:    Licensing/Infrastructure/Servers                                                                            
     Transaction Details                                                                                                        
     Title:    Funding  for Microsoft  365 Copilot  AI Tools                                                                    
     for State Employees Section: Section 1                                                                                     
     Type:     Inc                                                                                                              
                                                                                                                                
     Line Items     (Amounts are in thousands)                                                                                  
     Personal Services: 0.0                                                                                                     
     Travel:   0.0                                                                                                              
     Services: 732.7                                                                                                            
                                                                                                                                
     Positions                                                                                                                  
     Permanent Full-Time:     0                                                                                                 
     Permanent Part-Time:     0                                                                                                 
     Temporary:     0                                                                                                           
                                                                                                                                
     Funding   (Amounts are in thousands)                                                                                       
     1004 Gen Fund 732.7                                                                                                        
                                                                                                                                
     Explanation                                                                                                                
     Microsoft  365  Copilot  provides AI  assistance  which                                                                    
     greatly  enhance the  productivity  and utilization  of                                                                    
     current  Microsoft  products. This  amendment  restores                                                                    
     the funding that was disapproved in subcommittee.                                                                          
                                                                                                                                
     Agency:   Administration                                                                                                   
     Appropriation: Office of Information Tech                                                                                  
     Allocation:    Licensing/Infrastructure/Servers                                                                            
                                                                                                                                
     Transaction Details                                                                                                        
     Title:    Artificial Intelligence Projects                                                                                 
     Section: Section 1                                                                                                         
     Type:     IncOTI                                                                                                           
                                                                                                                                
     Line Items     (Amounts are in thousands)                                                                                  
     Personal Services: 0.0                                                                                                     
     Travel:   0.0                                                                                                              
     Services: 360.0                                                                                                            
     Commodities:   0.0                                                                                                         
     Capital Outlay:     0.0                                                                                                    
     Grants:   0.0                                                                                                              
     Miscellaneous: 0.0                                                                                                         
     Total: 360.0                                                                                                               
                                                                                                                                
     Positions                                                                                                                  
     Permanent Full-Time:     0                                                                                                 
     Permanent Part-Time:     0                                                                                                 
     Temporary:     0                                                                                                           
                                                                                                                                
     Funding   (Amounts are in thousands)                                                                                       
     1004 Gen Fund 360.0                                                                                                        
                                                                                                                                
     Explanation                                                                                                                
     The Department  of Administration  is seeking  to build                                                                    
     initial AI tools in an  effort to reduce administrative                                                                    
     waste by  increasing productivity. This  amendment aims                                                                    
     to  restore   the  funding  that  was   disapproved  in                                                                    
     subcommittee.                                                                                                              
                                                                                                                                
Representative Hannan OBJECTED for discussion.                                                                                  
                                                                                                                                
Representative Stapp explained that  the amendment looked to                                                                    
utilize  an   artificial  intelligence   (AI)  appropriation                                                                    
reduced by  the subcommittee.  The purpose  was to  start to                                                                    
achieve the  ability to  do a  zero-based budget.  He stated                                                                    
that in  the previous  amendment, the committee  member from                                                                    
Juneau  had asserted  to the  ability of  the department  to                                                                    
form  the  task. He  stated  it  was  a valid  argument.  He                                                                    
suggested that if the state  was going to start utilizing AI                                                                    
for efficiencies in departments, allowing  the AI tool to be                                                                    
utilized  for  the purpose  of  zero-based  budgeting was  a                                                                    
worthy goal.  He agreed that  zero-based budgeting  could be                                                                    
complicated  and resource  intensive.  He thought  it was  a                                                                    
good use of AI Copilot.                                                                                                         
                                                                                                                                
Representative Bynum supported the  amendment. He thought it                                                                    
was a  valuable opportunity  for the  state to  use AI  as a                                                                    
tool. He knew  many individuals in the  technical world were                                                                    
deploying   the   technologies   and   creating   tremendous                                                                    
improvements in  productivity. He stated the  tools were not                                                                    
meant  to  replace  people,  but   they  would  allow  state                                                                    
employees  to  maximize  their time  and  bring  information                                                                    
forward that may not have  been readily available. He stated                                                                    
it  was a  tremendous opportunity  to increase  productivity                                                                    
and  he  strongly supported  the  amendment.  He thought  it                                                                    
would  be  money well  spent.  He  believed the  departments                                                                    
would be  able to  come back to  the legislature  to outline                                                                    
how it was beneficial.                                                                                                          
                                                                                                                                
4:23:55 PM                                                                                                                    
                                                                                                                                
Representative  Hannan stated  that  when she  met with  the                                                                    
Office  of  Information  Technology  (OIT)  on  the  two  AI                                                                    
components,  the  division's  description  did  not  include                                                                    
zero-based  budgeting. She  could wrap  her head  around the                                                                    
amendment  if   it  was  for   OIT  to   attempt  zero-based                                                                    
budgeting. She  noted OIT had  fairly predictable  costs and                                                                    
employees. However,  the department had requested  the funds                                                                    
for a  new product to  pilot for a specific  purpose related                                                                    
to payroll.  She underscored that  the amendment  would fund                                                                    
the  increment but  directed the  department to  use it  for                                                                    
zero-based budgeting.  She had seen no  analysis or argument                                                                    
from the department  indicating it would use  the AI product                                                                    
for zero-based budgeting.                                                                                                       
                                                                                                                                
Co-Chair  Josephson shared  that he  met with  Department of                                                                    
Administration (DOA)  officials and there was  no discussion                                                                    
of zero-based budgeting.                                                                                                        
                                                                                                                                
Co-Chair  Schrage opposed  the  amendment.  He recalled  the                                                                    
requested increment  was for about 2,000  licenses to deploy                                                                    
out to  various employees throughout  the state, but  he did                                                                    
not  hear  much of  a  plan  about  what training  would  be                                                                    
provided and how the Copilot  services would be utilized. He                                                                    
thought  there  had not  been  a  lot  of thought  given  to                                                                    
choosing  the number  2,000. He  had  not heard  substantial                                                                    
reasoning  that justified  the expense.  He  was not  saying                                                                    
there was no value in using  AI in the future, he thought it                                                                    
could  make employees  more efficient  and information  more                                                                    
readily available.  He had  not heard  of any  connection to                                                                    
zero based budgeting from the  department. He recalled there                                                                    
was a  small pilot program  planned for later in  the spring                                                                    
and he  wanted to  wait for the  results prior  to investing                                                                    
more money.                                                                                                                     
                                                                                                                                
Representative Stapp noted there  was someone available from                                                                    
DOA who could  answer the questions. He  had shared Co-Chair                                                                    
Schrage's  concerns   when  the   item  had  moved   out  of                                                                    
subcommittee. He  had subsequently talked to  the department                                                                    
and had  communicated he was  looking at  transitioning some                                                                    
of the  budgetary process  from a  baseline budget  to zero-                                                                    
based budgeting.  He had  asked the  department if  it could                                                                    
utilize  the [AI]  resources to  not  only improve  employee                                                                    
efficiency,  but to  give a  targeted purpose  to do  so. He                                                                    
asked  if   the  department   could  address   the  members'                                                                    
questions.                                                                                                                      
                                                                                                                                
Co-Chair  Josephson  noted  that   the  individual  was  not                                                                    
currently in the room and he was inclined to go to a vote.                                                                      
                                                                                                                                
4:27:31 PM                                                                                                                    
                                                                                                                                
Representative Hannan MAINTAINED the OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Johnson, Allard, Bynum, Tomaszewski, Stapp                                                                            
OPPOSED: Hannan, Jimmie, Galvin, Foster, Schrage, Josephson                                                                     
                                                                                                                                
The MOTION to adopt Amendment 18 FAILED (5/6).                                                                                  
                                                                                                                                
Representative Bynum  MOVED to  ADOPT Amendment 17  (copy on                                                                    
file):                                                                                                                          
                                                                                                                                
     Agency:   Administration                                                                                                   
     Appropriation: Office of Information Tech                                                                                  
     Allocation:    Licensing/Infrastructure/Servers                                                                            
                                                                                                                                
     Transaction Details                                                                                                        
     Title:    Add Funding for GA: Microsoft 365 Copilot AI                                                                     
     Tools for State Employees                                                                                                  
     Section: Section 1                                                                                                         
     Type:     Inc                                                                                                              
                                                                                                                                
                                                                                                                                
     Line Items (Amounts are in thousands)                                                                                      
     Personal Services: 0.0                                                                                                     
     Travel: 0.0                                                                                                                
     Services: 365.0                                                                                                            
     Commodities:   0.0                                                                                                         
     Capital Outlay:     0.0                                                                                                    
     Grants:   0.0                                                                                                              
     Miscellaneous:           0.0                                                                                               
     Total: 365.0                                                                                                               
                                                                                                                                
     Positions                                                                                                                  
     Permanent Full-Time:     0                                                                                                 
     Permanent Part-Time:     0                                                                                                 
     Temporary:     0                                                                                                           
                                                                                                                                
     Funding  (Amounts are in thousands)                                                                                        
     1004 Gen Fund 365.0                                                                                                        
                                                                                                                                
     Explanation                                                                                                                
     Funding for approx 1000 AI CoPilot Licenses.                                                                               
                                                                                                                                
Representative Hannan OBJECTED for discussion.                                                                                  
                                                                                                                                
Representative Bynum explained  that the amendment pertained                                                                    
to  the  same  technology  [as in  the  previous  amendment]                                                                    
applied in a  different way. The amendment  would enable DOA                                                                    
to  use  AI tools  to  fully  integrate into  the  Microsoft                                                                    
Office suites.  He stated  it would  be advantageous  to the                                                                    
departments  and  would  provide  the  ability  to  navigate                                                                    
Microsoft tools  with ease  and increased  productivity. The                                                                    
amendment would  add funding of  $365,000 and  would provide                                                                    
productivity  for 1,000  personnel. He  emphasized that  the                                                                    
tool would  increase government  efficiency. He  knew people                                                                    
who  were  using  the  [AI  Copilot] tool  at  work  in  the                                                                    
healthcare field. He shared that  they were immediately able                                                                    
to use the tool to make  meetings more productive and it had                                                                    
increased  the  capability  for staff  to  communicate  with                                                                    
colleagues. He  considered discussions  about how  to deploy                                                                    
the  program within  state  government.  He highlighted  the                                                                    
Department   of   Health   where   there   were   tremendous                                                                    
constraints on employees being able  to provide services. He                                                                    
noted that  the tool did  not require years of  training. He                                                                    
detailed that  the individual  he had  spoken with  had been                                                                    
using  the  product for  two  weeks  and they  were  already                                                                    
putting  it to  tremendous use.  He stated  that much  about                                                                    
learning the  tool would be self-exploratory  and he thought                                                                    
it would take  some time to explore the use.  He pointed out                                                                    
that AI had  not replaced him as an  engineer or legislator,                                                                    
but it had  made him more productive.  He strongly supported                                                                    
deploying AI technology to  increase efficiency in deploying                                                                    
resources more efficiently for citizens.                                                                                        
                                                                                                                                
4:31:31 PM                                                                                                                    
                                                                                                                                
Co-Chair Schrage  generally agreed with many  of the remarks                                                                    
made by  Representative Bynum. He  believed the  tools could                                                                    
be very powerful, but he  was concerned that new tools could                                                                    
come with  new challenges, and  he had personally  used [AI]                                                                    
tools in  the past  and had seen  errors and  other mistakes                                                                    
made. He thought there needed to  be a plan for how the tool                                                                    
would be  rolled out and  how employees would be  trained in                                                                    
order to be aware of some  of the problems that could occur.                                                                    
He  pointed  out  that  there   had  been  issues  in  state                                                                    
government where  AI tools were used  and official documents                                                                    
had false references and other  errors that never would have                                                                    
occurred if  a human produced  the document without  the use                                                                    
of  AI tools.  He  was  not indicating  the  tools were  not                                                                    
powerful, useful,  and helpful, but he  believed they needed                                                                    
to be applied  with the proper training  to avoid unintended                                                                    
consequences,  especially when  implemented in  a department                                                                    
that  he  believed  was already  strained.  He  opposed  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
Representative Bynum  provided wrap up on  the amendment. He                                                                    
understood that  concerns voiced  by Co-Chair  Schrage could                                                                    
happen.  He   shared  that  in  his   experience  using  the                                                                    
technology, it was able to  capture ideas, go through emails                                                                    
and documents,  and bring the  ideas into one space  that he                                                                    
could  read.  He  relayed that  he  checked  any  references                                                                    
included in  the information for accuracy.  He stressed that                                                                    
the tools had  brought information to his  attention that he                                                                    
would  not  have  thought  to  look at,  which  had  been  a                                                                    
tremendous resource.  He stated the tools  saved substantial                                                                    
time. He agreed  that if someone used the tool  to do all of                                                                    
the work, it  was a bad tool. He did  not believe the change                                                                    
in technology took away the need for due diligence.                                                                             
                                                                                                                                
4:34:12 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:36:17 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Bynum, Stapp, Johnson, Tomaszewski                                                                                    
OPPOSED:  Hannan, Jimmie,  Allard, Galvin,  Schrage, Foster,                                                                    
Josephson                                                                                                                       
                                                                                                                                
The MOTION to adopt Amendment 17 FAILED (4/7).                                                                                  
                                                                                                                                
4:37:08 PM                                                                                                                    
                                                                                                                                
Representative  Bynum remarked  that he  had [in  a previous                                                                    
meeting] made  a motion  to rescind  action on  Amendment 14                                                                    
(copy on  file). However, after discussion  with members, he                                                                    
did  not believe  it would  have a  positive result.  He had                                                                    
many concerns  about the unallocated cut  and had previously                                                                    
made his concerns  known. He had provided a  solution to the                                                                    
co-chairs and  he thought  it was  a way  to get  around the                                                                    
potential  unconstitutional  unallocated  cut;  however,  he                                                                    
would not  offer it because  he did  not believe he  had the                                                                    
votes to pass it.                                                                                                               
                                                                                                                                
4:38:10 PM                                                                                                                    
                                                                                                                                
Representative  Bynum  stated  there had  [previously]  been                                                                    
substantial  discussion about  Amendment 49  (copy on  file)                                                                    
that  had been  tabled [Amendment  49 would  provide funding                                                                    
for the  unfunded HB 230  (33rd Legislature),  AS 14.20.225,                                                                    
providing  $5,000 to  certified  teachers and  reimbursement                                                                    
for  teachers  pursuing  initial certification  or  renewing                                                                    
certification].  He wondered  whether Co-Chair  Josephson or                                                                    
Representative Galvin  planned to  bring the  amendment back                                                                    
before the committee.                                                                                                           
                                                                                                                                
Representative Galvin stated her  intent to remove Amendment                                                                    
49 from being tabled.                                                                                                           
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Representative  Galvin thought  a  conceptual amendment  had                                                                    
previously  been  adopted  to  Amendment  49.  She  believed                                                                    
Representative Bynum had something he wanted to say.                                                                            
                                                                                                                                
4:39:32 PM                                                                                                                    
                                                                                                                                
Representative Bynum shared that he  had worked with LFD and                                                                    
Legislative  Legal Services  to  come up  with a  conceptual                                                                    
amendment  to  address  some  of  the  previously  expressed                                                                    
concerns  from   committee  members.   He  MOVED   to  ADOPT                                                                    
conceptual Amendment  2, 34-LS8001\A.8 (Marx,  4/2/25) (copy                                                                    
on file) to Amendment 49:                                                                                                       
                                                                                                                                
     Page _,   following line _:                                                                                                
     Insert a new bill section to read:                                                                                         
     "*Sec.A.    DEPARTMENT   OF    EDUCATION   AND    EARLY                                                                    
     DEVELOPMENT. The  sum of $554,000 is  appropriated from                                                                    
     the  general fund  to the  Department of  Education and                                                                    
     Early     Development,     education    support     and                                                                    
     administrative    services,    student    and    school                                                                    
     achievement,   for  teacher   incentive  payments   and                                                                    
     reimbursements  for  national board  certification,  as                                                                    
     authorized by AS 14.20.225, as follows:                                                                                    
     (1)  the amount  necessary  to  make all  reimbursement                                                                    
     payments authorized by AS 14.20.225(b);                                                                                    
     (2)  the  remaining  balance  to  make  national  board                                                                    
     certification  incentive  payments   authorized  by  AS                                                                    
     14.20.225(a),  to  be   distributed  on  a  first-come,                                                                    
     first-served basis."                                                                                                       
                                                                                                                                
Representative Hannan OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair Josephson recognized  Representative Julie Coulombe                                                                    
in the committee room.                                                                                                          
                                                                                                                                
Representative Bynum requested an at ease.                                                                                      
                                                                                                                                
4:40:40 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:43:00 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Josephson  reviewed that Amendment 49  pertained to                                                                    
teacher incentive  payments and reimbursements  for national                                                                    
board certification.  The legislature  had passed a  law the                                                                    
previous session  as a  way of  commending and  honoring the                                                                    
skill  required   to  get  the  award.   The  committee  had                                                                    
previously  adopted  an  amendment [conceptual  Amendment  1                                                                    
(copy  on file)]  to reduce  the amount  of the  grants from                                                                    
$750,554 to  $554,000. The  committee was  currently hearing                                                                    
conceptual Amendment 2 to Amendment 49.                                                                                         
                                                                                                                                
4:43:54 PM                                                                                                                    
                                                                                                                                
Representative  Bynum  explained  the  conceptual  amendment                                                                    
would move  the money  out of the  numbers section  into the                                                                    
language section  of the bill  and clearly outlined  how the                                                                    
money  was to  be spent.  The money  was first  to reimburse                                                                    
actual  expenses,  with the  remaining  balance  to be  made                                                                    
available   for  national   board  certification   incentive                                                                    
payments authorized  by AS  14.20.225(a), to  be distributed                                                                    
on a first-come, first-served basis.                                                                                            
                                                                                                                                
Representative   Galvin  appreciated   the   maker  of   the                                                                    
amendment  working  hard  to align  with  the  statute.  She                                                                    
highlighted  that  there may  be  changes  necessary in  the                                                                    
future if  the number of  teachers utilizing the  grants was                                                                    
large. She described  the individuals as the  "black belt of                                                                    
teachers."  She  wanted  to  ensure  they  were  encouraging                                                                    
individuals  to   become  the  highest  and   best  teachers                                                                    
possible.  She believed  the amendment  was  good in  making                                                                    
sure  the  legislature  was   being  fiscally  prudent.  She                                                                    
especially  appreciated  the  word  "reimburse"  because  it                                                                    
helped  to  ensure  it  was not  doing  anything  extra  but                                                                    
meeting the  needs of  nationally board  certified teachers.                                                                    
She supported the conceptual amendment.                                                                                         
                                                                                                                                
Representative  Hannan asked  if  moving the  item from  the                                                                    
numbers  section would  result  in a  one-time increment  as                                                                    
opposed  to a  base  increment. She  noted  the funding  had                                                                    
previously  been in  the base  under the  original Amendment                                                                    
49. She  noted that the  dollar amount in the  amendment had                                                                    
been reduced because  the number of teachers  who would take                                                                    
advantage  of  the  funding  was   unknown  and  it  changed                                                                    
annually. She looked  at the verbiage "to  be distributed on                                                                    
a  first-come,  first-served  basis"   on  line  11  of  the                                                                    
conceptual  amendment. She  was concerned  about a  scenario                                                                    
where  first 100  teachers received  the funding,  but there                                                                    
was not enough money to  pay the 101st and 102nd applicants.                                                                    
She  wondered   if  the   individuals  would   be  excluded.                                                                    
Alternatively, she  wondered if the language  meant that all                                                                    
applicants would be paid, but in the order they applied.                                                                        
                                                                                                                                
4:47:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Josephson asked to hear from Mr. Painter.                                                                              
                                                                                                                                
Mr. Painter responded that how  the language was written was                                                                    
a policy  call. He stated  it could  be written as  an open-                                                                    
ended  estimate for  however many  people came  forward with                                                                    
reimbursements,  which would  enable anyone  who applied  to                                                                    
receive the  funds. Alternatively,  if the number  was fixed                                                                    
at a  certain amount, the department  would need instruction                                                                    
about what to do if  the appropriated amount was not enough.                                                                    
He  elaborated that  with the  language "first-come,  first-                                                                    
served" the first people who  applied would receive the full                                                                    
reimbursement  and  others  would  not.  Alternatively,  the                                                                    
funds  could be  prorated  so everyone  would  have to  come                                                                    
forward for  reimbursement and  the department  would decide                                                                    
the number of people  who received reimbursement and prorate                                                                    
the  funding. He  suggested that  if the  committee did  not                                                                    
want to limit  the funding, the appropriation  would need to                                                                    
be  open-ended to  encompass however  much it  may cost.  He                                                                    
remarked that it would be  a very different policy call than                                                                    
limiting the appropriation at a certain sum.                                                                                    
                                                                                                                                
Representative Galvin relayed that  her office had done more                                                                    
research in the  past couple of days to get  an updated list                                                                    
of  qualifying individuals.  The updated  information showed                                                                    
the number of  individuals was currently 85  instead of 101.                                                                    
She believed  the $554,000 could  accommodate the  number of                                                                    
individuals for  the year; however,  the number may  need to                                                                    
be  adjusted  if there  were  many  more applicants  in  the                                                                    
future.                                                                                                                         
                                                                                                                                
Co-Chair   Josephson  believed   language  amendments   were                                                                    
revisited annually.                                                                                                             
                                                                                                                                
Representative Allard OBJECTED.                                                                                                 
                                                                                                                                
Representative  Bynum provided  wrap  up  on the  amendment.                                                                    
There  had been  a concern  that with  the increment  in the                                                                    
numbers section,  the committee  had been unable  to specify                                                                    
how  the funding  would be  deployed. The  intention of  the                                                                    
conceptual  amendment  was  to ensure  individuals  who  had                                                                    
spent  money on  the certification  would be  reimbursed. He                                                                    
explained if  there was any money  left over it went  to the                                                                    
incentive payment.  He elaborated  that the number  had been                                                                    
adjusted down by conceptual Amendment  1 and would assume to                                                                    
cover  all  eligible  individuals. He  underscored  that  he                                                                    
wanted  to make  sure the  funding  went to  people who  had                                                                    
actually  spent money  first. He  noted  that the  amendment                                                                    
language was  written in a  way in  order to have  a defined                                                                    
specific amount.                                                                                                                
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Jimmie,    Johnson,    Galvin,   Stapp,    Allard,                                                                    
Tomaszewski, Bynum, Hannan, Foster, Schrage, Josephson                                                                          
OPPOSED: None                                                                                                                   
                                                                                                                                
The MOTION PASSED (11/0). There  being NO further OBJECTION,                                                                    
conceptual Amendment 2 to Amendment 49 was ADOPTED.                                                                             
                                                                                                                                
4:52:11 PM                                                                                                                    
                                                                                                                                
Representative   Tomaszewski  MOVED   to  ADOPT   conceptual                                                                    
Amendment  3.  He  highlighted   Amendment  47  by  Co-Chair                                                                    
Schrage  to  remove  $400,000  in   general  funds  for  the                                                                    
Imagination Library. He suggested  the funding could be used                                                                    
for paying for Amendment  49. The conceptual amendment would                                                                    
remove $400,000 from the Imagination Library.                                                                                   
                                                                                                                                
Co-Chair Josephson OBJECTED.                                                                                                    
                                                                                                                                
Representative   Tomaszewski  provided   wrap   up  on   the                                                                    
amendment. He recognized the importance  of reading, but the                                                                    
state was  in a budget  crunch. He stated the  funding could                                                                    
be used for many things in education funding.                                                                                   
                                                                                                                                
4:53:30 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:56:34 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative Galvin addressed  conceptual Amendment 3. She                                                                    
was concerned  about displacing early learning  funds in any                                                                    
way. The  subcommittee had chosen  to make an  investment in                                                                    
early  learning.  She relayed  that  Alaska  had the  lowest                                                                    
investment in early  learning in the nation.  She stated the                                                                    
readiness of  kindergarten children was about  30.7 percent.                                                                    
She detailed  that when children  arrived with 11 out  of 13                                                                    
of  the  skills  they  should  have  (e.g.,  vocabulary  and                                                                    
understanding of how  to work as a group), they  were one or                                                                    
two  years  behind.  She  highlighted  that  81  percent  of                                                                    
parents  were  reading  more  to  children  because  of  the                                                                    
Imagination  Library. The  program was  a tool  for parents,                                                                    
especially for low income families.                                                                                             
                                                                                                                                
Representative   Galvin  discussed   the  benefits   of  the                                                                    
Imagination  Library. The  program helped  children to  grow                                                                    
their  vocabulary. One  of the  major ways  for children  to                                                                    
increase brain development was for  parents to sit with them                                                                    
with a  book. Over  140 communities  in Alaska  were serving                                                                    
families with  books. She listed communities  throughout the                                                                    
state  that were  benefiting from  the program.  The funding                                                                    
sources  included   funding  from   communities,  foundation                                                                    
funding,  state, corporate,  and  other.  She stressed  that                                                                    
investing in the program meant  K-12 money would go further.                                                                    
She  emphasized that  70 percent  of kindergarteners  needed                                                                    
extra  help to  get up  to speed.  She discussed  the overly                                                                    
large   class  sizes.   There   were   not  enough   reading                                                                    
specialists  in   Alaska.  She   stated  that   things  were                                                                    
happening that  she did not  support like pulling  kids from                                                                    
recess and  lunch to  gain the skills.  She stressed  it was                                                                    
not  fair  to  the  children. The  good  work  happening  in                                                                    
communities  was not  enough.  She  highlighted things  like                                                                    
expressive and receptive  communication skills and cognitive                                                                    
awareness   gained   through   reading.   The   kindergarten                                                                    
developmental  profile looked  at things  like whether  kids                                                                    
could  sustain   attention  to  tasks  and   persist  facing                                                                    
challenges. She  stressed that the  time a child spent  on a                                                                    
parent's lap was essential.                                                                                                     
                                                                                                                                
Representative  Galvin  discussed  that members  around  the                                                                    
committee table likely bought books  for their children, but                                                                    
there were many  families in the state where a  book sent to                                                                    
them by mail  made all of the difference.  She stressed that                                                                    
social  workers  successful  with families  showed  up  with                                                                    
extra  gifts for  the families.  She  stated it  was how  to                                                                    
develop a  relationship with the  families in order  to tell                                                                    
them  how  to work  with  their  kids.  She noted  that  the                                                                    
average literacy rate in Alaska  was 5th grade. She stressed                                                                    
the importance of loving time  spent with children. Families                                                                    
were  reminded  there  were other  ways  to  interface  with                                                                    
children when they received a  book. She emphasized the cost                                                                    
spent on education. The books  were about lifting children's                                                                    
spirits.  She  stated that  Best  Beginnings  would like  to                                                                    
expand  to  more  families. There  were  other  things  that                                                                    
needed to be done in  early learning. She provided examples.                                                                    
She  emphasized   the  Imagination  Library  was   a  proven                                                                    
program.                                                                                                                        
                                                                                                                                
5:07:35 PM                                                                                                                    
                                                                                                                                
Representative  Galvin  continued  her remarks.  She  stated                                                                    
that 14,981  kids were enrolled  in the program.  There were                                                                    
about  50,000  kids   in  the  age  range   in  Alaska.  She                                                                    
emphasized  that children  who participated  in the  program                                                                    
had higher  rates of kindergarten readiness.  She provided a                                                                    
definition of  readiness. The finding was  consistent across                                                                    
student groups  including English language  learners, Native                                                                    
students,  and  economically   disadvantaged  students.  She                                                                    
relayed  that in  2016, 30  percent  of Imagination  Library                                                                    
participants were Kindergarten ready  compared to 25 percent                                                                    
of similar  students who did  not participate.  She believed                                                                    
it  mattered. She  shared that  teachers reported  having to                                                                    
deal with  multiple grade  levels at a  time and  had overly                                                                    
large class sizes.  She asked what was being done  to the K-                                                                    
12 system. She stressed that  kids were being started off on                                                                    
the wrong foot and the Imagination Library helped.                                                                              
                                                                                                                                
5:10:52 PM                                                                                                                    
                                                                                                                                
Co-Chair  Josephson remarked  that  several minutes  earlier                                                                    
Representative  Galvin had  stated she  wanted to  make sure                                                                    
the committee's  time was  not wasted.  He replied  that she                                                                    
had not wasted one moment of his time.                                                                                          
                                                                                                                                
Representative   Jimmie   acknowledged    the   remarks   by                                                                    
Representative  Galvin.  She  believed  it  was  great  what                                                                    
Representative  Galvin was  doing. She  knew they  were both                                                                    
mothers  and  grandmothers.  She  stated  that  reading  was                                                                    
important and  it was not  fair to  kids when they  were not                                                                    
able to  read at a  good level. She referenced  fighting for                                                                    
funding for the Base Student  Allocation (BSA) and stated it                                                                    
was  also not  fair for  students  in her  district who  had                                                                    
schools that were not functional,  had no running water, and                                                                    
broken windows. She  shared that she had  recently watched a                                                                    
video  from the  Yupik School  District, and  it was  facing                                                                    
numerous  challenges. She  did not  see  it as  the time  to                                                                    
expand the [Imagination Library]  program, but to find funds                                                                    
to   improve   school   infrastructure.  She   stated   that                                                                    
Representative Galvin's  heart was  in the right  place, and                                                                    
she understood where she was coming from.                                                                                       
                                                                                                                                
Representative  Galvin replied  that she  would continue  to                                                                    
support Representative Jimmie's schools.                                                                                        
                                                                                                                                
Representative  Jimmie stated  that  she  could not  support                                                                    
[the additional  increment for  Imagination Library]  at the                                                                    
current time.                                                                                                                   
                                                                                                                                
Co-Chair  Josephson  asked  if  there was  any  dispute  the                                                                    
amendment reflected an increase of funding from the base.                                                                       
                                                                                                                                
Representative Allard  believed Representative Tomaszewski's                                                                    
conceptual   amendment   would   cut   $400,000   from   the                                                                    
Imagination Library to use for Amendment 49.                                                                                    
                                                                                                                                
Representative Tomaszewski  agreed. He believed  the funding                                                                    
for the Imagination Library increment  had been added to the                                                                    
base  in  subcommittee.  He explained  that  the  conceptual                                                                    
amendment would  not eliminate funding  for the  program, it                                                                    
would remove the increase adopted in subcommittee.                                                                              
                                                                                                                                
Representative  Allard stated  that Representative  Galvin's                                                                    
remarks were  a marathon  speech. She  had been  leaning one                                                                    
way, but  the remarks resulted  in her going in  a different                                                                    
direction. She  stated the Dolly Parton  Imagination Library                                                                    
was a nonprofit  used in 70 Alaskan  communities. She stated                                                                    
that because the state had  magnificent libraries, she would                                                                    
vote  against  increasing the  funds  for  the program.  She                                                                    
remarked  that everything  she had  read indicated  that the                                                                    
program was  available to every  child. She did not  want to                                                                    
"keep throwing bad money after  bad." She stated that Alaska                                                                    
spent  more money  on education  for its  children than  any                                                                    
other state. She supported conceptual Amendment 3.                                                                              
                                                                                                                                
5:15:03 PM                                                                                                                    
                                                                                                                                
Co-Chair Schrage  stated that  it was  a hard  situation. He                                                                    
stated   the  conceptual   amendment   was  essentially   an                                                                    
amendment he had drafted but  had not yet introduced. He had                                                                    
not offered the amendment yet  because he felt the committee                                                                    
had made  progress holding  down its  budget. He  had shared                                                                    
privately with committee members  that Amendment 49 gave him                                                                    
some concern,  not because he  did not believe  in rewarding                                                                    
teachers who went after the certifications.                                                                                     
                                                                                                                                
Co-Chair Schrage  underscored there  was limited  money, and                                                                    
it was  not possible to  do all  things. He stated  that the                                                                    
conceptual amendment  helped to make Amendment  49 more cost                                                                    
neutral.  He stated  it was  not possible  to do  everything                                                                    
despite the  value of so  many of  the things. He  could not                                                                    
disagree  with  anything   Representative  Galvin  said.  He                                                                    
agreed on the importance of reading,  but if he wanted to be                                                                    
able to  adequately fund  the K-12  education system  and do                                                                    
things   like   provide   bonuses  for   teachers   to   get                                                                    
certifications in  order to  be able  to handle  students in                                                                    
their  classes,  it was  necessary  to  allocate the  scarce                                                                    
resources the  best he  could and  it involved  making tough                                                                    
choices. He relayed there was  $320,000 in the base [for the                                                                    
Imagination  Library] and  the  subcommittee  had more  than                                                                    
doubled the  figure with  an increment  of $400,000.  He did                                                                    
not  know it  was  the fiscal  environment  where the  state                                                                    
could  afford  to  double the  funding,  especially  if  the                                                                    
committee   was    going   to   fund    reimbursements   for                                                                    
certifications. He stated  it was a tough issue  for him and                                                                    
his family  was signed  up for  the Imagination  Library. He                                                                    
did  not  want   anyone  to  think  he   was  dismissive  of                                                                    
Representative  Galvin's position  and that  he did  not see                                                                    
the value  in the program.  The state had  limited resources                                                                    
to allocate to all of the important things.                                                                                     
                                                                                                                                
Co-Chair Schrage  would support  the amendment in  order for                                                                    
the teachers to  be able to get advanced training  and be as                                                                    
prepared  as possible  to handle  difficult class  sizes. He                                                                    
remarked  that teachers  had  students  with many  different                                                                    
levels of  reading comprehension  and readiness  for school.                                                                    
He  wanted  to make  sure  teachers  were prepared.  He  was                                                                    
confident  many students  would still  receive Dolly  Parton                                                                    
books  in their  early  years. He  supported the  conceptual                                                                    
amendment  in order  to be  able to  support the  underlying                                                                    
Amendment 49.                                                                                                                   
                                                                                                                                
5:18:33 PM                                                                                                                    
                                                                                                                                
Representative   Johnson   appreciated  the   Dolly   Parton                                                                    
foundation and  what Dolly Parton had  done. She highlighted                                                                    
that  the state  put in  $325,000  for the  program and  the                                                                    
program  provided  matching  funds.   She  stated  that  the                                                                    
amendment  would not  take away  books from  any child.  She                                                                    
would support  the conceptual  amendment. She  expressed her                                                                    
appreciation  for  the program  and  was  glad it  had  been                                                                    
funded at the level currently  in the base. She thought they                                                                    
were  doing   good  work.  She   appreciated  Representative                                                                    
Galvin's  impassioned speech,  but  she  clarified that  the                                                                    
committee  was  not  cutting  out  existing  funds  for  the                                                                    
program,  it  was removing  the  addition  that doubled  the                                                                    
funding.                                                                                                                        
                                                                                                                                
5:20:02 PM                                                                                                                    
                                                                                                                                
Representative  Bynum had  not  been sure  how removing  the                                                                    
funding would impact the  [Imagination Library] program, but                                                                    
currently  there were  20,000  participants  in the  program                                                                    
according to  Dolly Parton's website. He  wondered about the                                                                    
number of  kids impacted and  whether the program  was being                                                                    
removed  altogether. He  understood they  were not  removing                                                                    
the program and  the amendment would remove  an increase. He                                                                    
did not  know the accurate  number of participants,  but the                                                                    
Dolly Parton  website listed Alaska's  number at  20,000. He                                                                    
thought it sounded  like a robust program in  Alaska, and he                                                                    
agreed with  many of the  other committee  members' remarks.                                                                    
He would support the conceptual amendment.                                                                                      
                                                                                                                                
Representative   Tomaszewski  provided   wrap   up  on   the                                                                    
amendment. He supported the Imagination  Library, but he did                                                                    
not  support doubling  the  increment in  a  year where  the                                                                    
legislature  was searching  for money  for important  things                                                                    
like  education,  public  safety,   and  all  of  the  other                                                                    
departments.  He  thanked   Representative  Galvin  for  her                                                                    
impassioned speech  on the positive aspects  of the program.                                                                    
He  believed  the  committee needed  to  use  its  fiduciary                                                                    
responsibility  and   use  it   wisely.  He   supported  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
A  roll  call  vote  was   taken  on  the  motion  to  adopt                                                                    
conceptual Amendment 3 to Amendment 49.                                                                                         
                                                                                                                                
IN FAVOR: Allard,   Tomaszewski,  Bynum,   Johnson,  Jimmie,                                                                    
Stapp, Schrage                                                                                                                  
OPPOSED: Hannan, Galvin, Foster, Josephson                                                                                      
                                                                                                                                
The MOTION  PASSED (7/4). There being  NO further OBJECTION,                                                                    
conceptual Amendment 3 to Amendment 49 was ADOPTED.                                                                             
                                                                                                                                
Co-Chair  Josephson  stated  that the  conceptual  amendment                                                                    
effectively  adopted Amendment  47 but  would be  treated as                                                                    
part of Amendment 49.                                                                                                           
                                                                                                                                
5:23:13 PM                                                                                                                    
                                                                                                                                
Representative  Galvin  heard  members' concerns  about  the                                                                    
budget  and understood.  She also  understood that  with the                                                                    
$400,000  [added to  the  Imagination  Library increment  in                                                                    
subcommittee]  she had  been trying  to reach  an additional                                                                    
10,000 kids out  of the 50,000 total. She  shared that there                                                                    
had  been  no inflationary  increase  for  the program.  She                                                                    
MOVED  to ADOPT  conceptual  Amendment 4  that would  remove                                                                    
$200,000 from  the Imagination  Library instead  of $400,000                                                                    
to go towards Amendment 49.                                                                                                     
                                                                                                                                
Representative Allard and Representative Stapp OBJECTED.                                                                        
                                                                                                                                
Co-Chair Josephson  clarified there had been  three previous                                                                    
conceptual amendments  to Amendment  49. He stated  that the                                                                    
conceptual amendment  would add $200,000 to  the Imagination                                                                    
Library.                                                                                                                        
                                                                                                                                
Representative Galvin highlighted that  over the past couple                                                                    
of  days the  committee had  been doing  things like  paying                                                                    
$1.1 million for energy ratings that  did not yet need to be                                                                    
paid  in  one area  of  the  state.  She stressed  that  the                                                                    
increment  in  the  conceptual amendment  was  not  for  her                                                                    
district; it was for Alaska's  children. The amendment would                                                                    
reduce  the  increment  to  $200,000   to  be  sensitive  to                                                                    
concerns around  being fiscally  responsible. She  asked the                                                                    
committee to consider adding  the increment with recognition                                                                    
there  had   been  no  inflationary  additions.   She  noted                                                                    
inflationary  additions  had  been   added  for  most  other                                                                    
departments and programs.                                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Galvin,  Hannan, Jimmie,  Bynum, Schrage,  Foster,                                                                    
Josephson                                                                                                                       
OPPOSED: Johnson, Stapp, Allard, Tomaszewski                                                                                    
                                                                                                                                
The MOTION  PASSED (7/4). There being  NO further OBJECTION,                                                                    
conceptual Amendment 4 to Amendment 49 was ADOPTED.                                                                             
                                                                                                                                
5:27:14 PM                                                                                                                    
                                                                                                                                
Co-Chair  Josephson  noted  there   had  been  a  series  of                                                                    
amendments adopted to Amendment 49.                                                                                             
                                                                                                                                
Representative  Johnson  asked  for an  explanation  of  the                                                                    
amendment as amended.                                                                                                           
                                                                                                                                
Co-Chair Josephson  explained that Amendment 49  was about a                                                                    
bill passed  the previous session carried  by Representative                                                                    
Rebecca Himschoot. He stated it  was an unfunded law and the                                                                    
committee was  trying to provide  the funding. There  was an                                                                    
amendment  adopted  to  reduce  the  $750,000  to  $554,000.                                                                    
Additionally,  conceptual  amendments  had been  adopted  to                                                                    
decrease  funding  added  for  the  Imagination  Library  by                                                                    
$200,000.  There was  also  an  amendment by  Representative                                                                    
Bynum that identified how the  monies for the Representative                                                                    
Himschoot bill would be paid.                                                                                                   
                                                                                                                                
Representative Allard OBJECTED.                                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Jimmie,  Hannan,  Stapp, Galvin,  Bynum,  Johnson,                                                                    
Tomaszewski, Foster, Schrage, Josephson                                                                                         
OPPOSED: Allard                                                                                                                 
                                                                                                                                
The MOTION PASSED (10/1).                                                                                                       
                                                                                                                                
There being NO further OBJECTION, Amendment 49 was ADOPTED                                                                      
as amended.                                                                                                                     
                                                                                                                                
5:29:51 PM                                                                                                                    
                                                                                                                                
Co-Chair Josephson asked if there were other amendments                                                                         
from committee members.                                                                                                         
                                                                                                                                
Representative  Stapp  stated  that  he  did  not  have  any                                                                    
additional  amendments.  He  noted   that  some  items  were                                                                    
tabled, but  he did not  feel the need  to make a  motion to                                                                    
remove items from  table. He assumed the  majority could un-                                                                    
table any items it may want to take up.                                                                                         
                                                                                                                                
Representative Bynum MOVED to ADOPT Amendment 51 (copy on                                                                       
file):                                                                                                                          
                                                                                                                                
     Agency:   Environmental Conservation                                                                                       
     Appropriation: Water                                                                                                       
     Allocation:    Water Quality Infrastructure                                                                                
                                                                                                                                
     Transaction Details                                                                                                        
     Title:    Add Funding for Clean Water Act Section 404                                                                      
     Assumption                                                                                                                 
     Section: Section 1                                                                                                         
     Type:     Inc                                                                                                              
                                                                                                                                
     Line Items (Amounts are in thousands)                                                                                      
     Personal Services: 750.3                                                                                                   
     Travel:   34.0                                                                                                             
     Services: 625.8                                                                                                            
     Commodities:   40.0                                                                                                        
     Capital Outlay:     0.0                                                                                                    
     Grants:   0.0                                                                                                              
     Miscellaneous:           0.0                                                                                               
     Total: 1,450.1                                                                                                             
                                                                                                                                
     Positions                                                                                                                  
     Permanent Full-Time:     5                                                                                                 
     Permanent Part-Time:     0                                                                                                 
     Temporary:     0                                                                                                           
                                                                                                                                
     Funding  (Amounts are in thousands)                                                                                        
     1004 Gen Fund 1,450.1                                                                                                      
                                                                                                                                
     Explanation                                                                                                                
     Add Funding for the  Dept of Environmental Conservation                                                                    
     to assume  the duties  of permitting under  section 404                                                                    
     of  the  clean   water  act  from  the   Army  Core  of                                                                    
     Engineers.                                                                                                                 
                                                                                                                                
Representative Stapp OBJECTED.                                                                                                  
                                                                                                                                
Representative Bynum explained the  amendment that would add                                                                    
$1.450   million  for   the   Department  of   Environmental                                                                    
Conservation (DEC) to assume the  duties of permitting under                                                                    
section 404 of the Clean Water  Act from the U.S. Army Corps                                                                    
of  Engineers. He  detailed that  the particular  section of                                                                    
the 404  Clean Water  Act dealt with  the dredging  of areas                                                                    
like ports  and harbors often  necessary to get  large ships                                                                    
into  ports. The  section  also dealt  with  the filling  of                                                                    
wetlands for  the various reasons.  He stated the  issue was                                                                    
important to  Alaska. He spoke  to the need to  ensure there                                                                    
was enforcement  uniformity by the  Army Corps  of Engineers                                                                    
within  Alaska.   He  highlighted   that  Alaska   was  very                                                                    
different  than places  like New  Jersey,  Texas, and  other                                                                    
places in  the U.S.  where the Army  Corps of  Engineers had                                                                    
jurisdiction. He stated it was  important because Alaska was                                                                    
made  up   of  approximately   43.6  percent   of  wetlands,                                                                    
accounting for 63  percent of all the U.S.  wetlands. One of                                                                    
the things  that had  been a theme  was ensuring  Alaska had                                                                    
some level of self-determination.                                                                                               
                                                                                                                                
Representative  Bynum  remarked  that   the  Army  Corps  of                                                                    
Engineers was  an outstanding organization that  he had been                                                                    
a member of  in the past. He  noted that when he  had been a                                                                    
member there had  been a joke that the  word bureaucracy was                                                                    
invented by  the Army  Corps of Engineers.  He noted  it was                                                                    
not  meant  in  a  negative   way.  He  thought  it  was  an                                                                    
opportunity for  Alaska to have self-determination  over its                                                                    
permitting  and  fill  for  wetlands  for  construction.  He                                                                    
asserted  it was  a major  issue for  his district  and many                                                                    
regions  around the  state  to  have a  bit  of autonomy  to                                                                    
better  utilize  the  permitting  process and  do  the  work                                                                    
responsibly. He  suggested that if  Alaska was to  take over                                                                    
the  duties   currently  assigned  to  the   Army  Corps  of                                                                    
Engineers,  it  would  mean the  state  could  adopt  better                                                                    
regulations that were more tailored  to Alaska, and it would                                                                    
be able to  achieve better outcomes for  things like housing                                                                    
development. He stressed that affordable  housing was a very                                                                    
important part  of the overall  economic need in  Alaska. He                                                                    
stated   that   regulatory   oversight  from   the   federal                                                                    
government stifled the state's ability to do that.                                                                              
                                                                                                                                
5:33:45 PM                                                                                                                    
                                                                                                                                
Representative  Hannan  opposed  the amendment.  She  stated                                                                    
that  every  dime  of  the   current  cost  associated  with                                                                    
Alaska's   404  permitting   was   borne   by  the   federal                                                                    
government. She  stressed that the $1.45  million would just                                                                    
be the  beginning of  a phased in  approach that  would take                                                                    
three years  to reach  a cost  of $6  million to  $8 million                                                                    
annually  and require  about 30  positions. She  believed it                                                                    
was a ridiculous thing to  add given the state's dire fiscal                                                                    
predicament and  the fact that  the scope of  federal change                                                                    
was present. She noted that  the Army Corps of Engineers who                                                                    
worked on  Alaska's 404 permitting were  Alaskans working in                                                                    
Alaska.   She   highlighted   that  no   other   state   had                                                                    
successfully  achieved  any   savings  by  implementing  404                                                                    
permitting.  She noted  that most  states had  given primacy                                                                    
back to  the federal  government. She  believed taking  on a                                                                    
new duty  with a  large ticket  price, which  currently cost                                                                    
the  state nothing,  was  fiscally  irresponsible. He  urged                                                                    
members to vote against the amendment.                                                                                          
                                                                                                                                
5:35:08 PM                                                                                                                    
                                                                                                                                
Representative Johnson  supported the amendment.  She stated                                                                    
that Alaska currently had an  opportunity it had not had for                                                                    
a number of years. She  stressed the state had been fighting                                                                    
and fighting the federal government.  She emphasized that it                                                                    
gave the  state the  chance to potentially  be in  charge of                                                                    
its own  destiny instead of  using fiscal  responsibility as                                                                    
an  excuse. She  had  seen  a lot  of  tantrum throwing  and                                                                    
discussion about fiscal responsibility  but she had not seen                                                                    
a whole  lot of it  based on  actions by the  committee. She                                                                    
emphatically  supported the  amendment  for  Alaska to  have                                                                    
primacy  and   its  own  oversight.  She   believed  it  was                                                                    
tremendously  important for  the  future of  Alaska and  its                                                                    
children.  She  underscored that  having  a  job, home,  and                                                                    
income  was a  way  to  make a  better  future for  Alaska's                                                                    
children.  She stressed  that she  "could not  sit here  and                                                                    
listen to this any longer."  She supported the amendment and                                                                    
believed it was the right thing to do.                                                                                          
                                                                                                                                
5:36:37 PM                                                                                                                    
                                                                                                                                
Co-Chair Josephson did not  think Representative Johnson had                                                                    
impugned anyone  and he did  not believe there had  been any                                                                    
tantrums either.                                                                                                                
                                                                                                                                
Representative  Stapp  supported  the amendment.  He  stated                                                                    
that  most   permits  that  were  denied   were  related  to                                                                    
wetlands. He  believed the state should  assume primacy over                                                                    
wetlands 404  permits, which would  help develop all  of the                                                                    
projects  desired   in  Alaska,  help  deploy   all  of  the                                                                    
Infrastructure  Investment and  Jobs  Act  (IIJA) money  the                                                                    
state  received,  and  help  employ  all  the  projects  for                                                                    
Broadband Equity,  Access, and Deployment (BEAD)  grants. He                                                                    
noted  that  Florida's  costs  had  increased  because  they                                                                    
tripled the number  of permits issued. He  believed the only                                                                    
way Alaska would survive was if  it was able to grow its way                                                                    
out   of  the   problem   with   resource  development.   He                                                                    
highlighted that everywhere the  change had been implemented                                                                    
had seen  increased development.  He thought  it was  a very                                                                    
good thing. He supported  increased development, which would                                                                    
result in  more money in state  coffers in order to  pay for                                                                    
things. He  pointed out the  session was half over,  and the                                                                    
legislature  had not  done anything  substantive  to try  to                                                                    
move  Alaska  forward. He  reiterated  his  support for  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
Representative  Tomaszewski  supported   the  amendment.  He                                                                    
remarked  on the  program's importance  and  thought it  was                                                                    
necessary for  legislators to think  about what  they wanted                                                                    
the state's future  to look like. He asked if  they wanted a                                                                    
federal  government  telling  Alaska   how  to  develop  its                                                                    
resources.  Alternatively, he  wondered  if  they wanted  to                                                                    
take Alaska's  destiny in  their own  hands. He  believed in                                                                    
the  latter   option.  He  believed  the   state  needed  to                                                                    
capitalize  on   tremendous  opportunities  coming   in  the                                                                    
future.                                                                                                                         
                                                                                                                                
5:38:49 PM                                                                                                                    
                                                                                                                                
Co-Chair Schrage would not disagree  there may be some merit                                                                    
in  the state  taking over  404  primacy in  the future.  He                                                                    
recalled when  the issue came  before him the first  time in                                                                    
the  32nd legislature.  He could  see some  merit in  having                                                                    
Alaskans  manage  their  wetlands. However,  his  consistent                                                                    
question  was about  how  the  state would  pay  for it.  He                                                                    
continued  to  receive  10-year   plans  from  the  governor                                                                    
showing  the  state  continuing  to run  into  the  red.  He                                                                    
thought the  incentive to receive 404  primacy had decreased                                                                    
given that  the federal  government paid everything  for the                                                                    
work at present and there  was a federal government in place                                                                    
that was  much more  supportive of resource  development. He                                                                    
highlighted that  the state's  track record  was not  a good                                                                    
one when  it came to  the administration of services  or any                                                                    
of its state  duties. He heard complaints  from the business                                                                    
industry and  resource development industry when  it came to                                                                    
the  time it  took for  the state  to permit  things and  to                                                                    
renew  business licenses.  He pointed  out that  basic state                                                                    
functions  were  currently  under  strain  and  he  was  not                                                                    
confident it would work out well  for Alaska to take on more                                                                    
responsibility. He thought if the  state took 404 primacy it                                                                    
could potentially  result in worse performance  when it came                                                                    
to permitting  projects. He  remained open  to the  idea but                                                                    
would not support it at present.                                                                                                
                                                                                                                                
Co-Chair  Josephson  stated  that the  majority  caucus  was                                                                    
passionately  opposed  to  the  idea for  fiscal  and  other                                                                    
reasons. He  agreed with Co-Chair  Schrage that  the federal                                                                    
administration would do  what it wanted with  the Army Corps                                                                    
of  Engineers.  He  believed  the  price  tag  exceeded  $10                                                                    
million. He would vote in opposition to the amendment.                                                                          
                                                                                                                                
5:41:55 PM                                                                                                                    
                                                                                                                                
Representative Bynum  provided wrap up on  the amendment. He                                                                    
stated  that although  the employees  working with  the Army                                                                    
Corps of Engineers  in Alaska may be  long-term Alaskans, it                                                                    
did not  mean they  were not operating  under the  rubric of                                                                    
"what is  the Army Corps  of Engineers." He had  worked with                                                                    
the  organization  for  10 years  and  assured  members  the                                                                    
organization did  not move swiftly on  things like dredging,                                                                    
river  operations,  and  dealing  with  wetland  issues.  He                                                                    
recognized  the organization  was  thorough  and provided  a                                                                    
good product, but it was not  swift. He remarked that it was                                                                    
problematic when trying to get things done.                                                                                     
                                                                                                                                
Representative Bynum  stressed that the state  would pay for                                                                    
the  expense  with  additional  development  in  Alaska.  He                                                                    
underscored that every day a  project was delayed was a lost                                                                    
opportunity.  He  remarked  that  legislators  talked  about                                                                    
school issues, being  able to buy groceries,  and being able                                                                    
to  heat homes.  He stated  that  one of  the major  driving                                                                    
factors for  doing those things  in his communities  was the                                                                    
cost of having  a home. He stated that the  ability to build                                                                    
housing  would bring  Coast Guard  and National  Oceanic and                                                                    
Atmospheric  Administration  (NOAA)  families.  He  stressed                                                                    
that in  order to ensure  utilities had employees  and there                                                                    
were schoolteachers  coming to  Alaskan communities,  it was                                                                    
necessary to make sure they  had housing. He emphasized that                                                                    
hurrying  the process  meant communities  would become  more                                                                    
prosperous  faster.  He  was not  advocating  for  bypassing                                                                    
environmental standards  or cutting corners, but  he thought                                                                    
Alaskans could do the work better.                                                                                              
                                                                                                                                
Representative  Bynum was  tired of  seeing his  communities                                                                    
suffer from the high cost  of housing because they could not                                                                    
get permitting for wetlands. He  pointed out that it was not                                                                    
possible  to step  off  the road  in  Ketchikan or  Wrangell                                                                    
without stepping  in wetlands. He stressed  that for housing                                                                    
and development in  oil, gas, mining, and  timber, the state                                                                    
needed access locally. He shared  that when he was a utility                                                                    
employer,  the  company  operated  at about  65  percent  of                                                                    
effective  staffing. He  shared  that he  would  put out  an                                                                    
advertisement for  an engineer and  they would come  to town                                                                    
and look at the cost of  housing and leave. He stated it was                                                                    
the  same situation  for schoolteachers  looking to  come to                                                                    
Alaska. The  Coast Guard did  not want to bring  families to                                                                    
Ketchikan  because of  the cost  of  housing. He  emphasized                                                                    
that  all of  the state's  industries were  impacted by  the                                                                    
situation. He listed  other issues facing the  state such as                                                                    
lack of childcare and declining student enrollment.                                                                             
                                                                                                                                
Representative Bynum  stressed that  404 primacy  could mean                                                                    
flourishing   industries,  reduced   cost  in   power,  more                                                                    
affordable  homes,  and  increased  student  enrollment.  He                                                                    
argued  that it  all came  down  to the  state's ability  to                                                                    
develop  on  its  own  terms.   He  strongly  supported  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Tomaszewski, Bynum, Stapp, Johnson, Allard                                                                            
OPPOSED: Hannan, Jimmie, Galvin, Schrage, Foster, Josephson                                                                     
                                                                                                                                
The MOTION to adopt Amendment 51 FAILED (5/6).                                                                                  
                                                                                                                                
5:47:35 PM                                                                                                                    
                                                                                                                                
Representative Stapp  MOVED to  ADOPT Amendment 12  (copy on                                                                    
file):                                                                                                                          
                                                                                                                                
     Agency: Fund Transfers                                                                                                     
     Appropriation: General Fund (Revenue)                                                                                      
     Allocation: General Fund (Revenue)                                                                                         
     Transaction Details                                                                                                        
     Title: 4.85% Draw from Earnings Reserve Account                                                                            
     Section: Language                                                                                                          
     Type: Lang                                                                                                                 
                                                                                                                                
     Line Items (Amounts are in thousands)                                                                                      
     Personal Services: 0.0                                                                                                     
     Travel: 0.0                                                                                                                
     Services: 0.0                                                                                                              
     Commodities: 0.0                                                                                                           
     Capital Outlay: 0.0                                                                                                        
     Grants: 0.0                                                                                                                
     Miscellaneous: 0.0                                                                                                         
     0.0                                                                                                                        
                                                                                                                                
     Positions                                                                                                                  
     Permanent Full-Time: 0                                                                                                     
     Permanent Part-Time: 0                                                                                                     
     Temporary: 0                                                                                                               
                                                                                                                                
     Funding (Amounts are in thousands)                                                                                         
                                                                                                                                
     Explanation                                                                                                                
     This  amendment  represents  a   4.85%  draw  from  the                                                                    
     Percent  of  Market  Value  (POMV)  from  the  earnings                                                                    
     reserve  account.  The  reduction   is  in  the  amount                                                                    
     appropriated to the general fund.                                                                                          
                                                                                                                                
Co-Chair Schrage OBJECTED for discussion.                                                                                       
                                                                                                                                
Representative  Stapp  explained  that the  amendment  would                                                                    
reduce the  percent of market  value (POMV) draw  taken from                                                                    
the  Permanent  Fund  Earnings  Reserve  Account  (ERA).  He                                                                    
detailed that the defined benefits  bill [HB 78] had a five-                                                                    
year   smoothing   average   in  which   Alaska   Retirement                                                                    
Management Board (ARMB)  was required to make  a decision in                                                                    
the  event the  plan  was unfunded.  He  elaborated that  it                                                                    
would  mean ARMB  would either  have to  take away  employee                                                                    
retirements  or  post-retirement pension  adjustment  (PRPA)                                                                    
payments, or  increase contributions for  existing employees                                                                    
in order  to fund  the liability. He  explained that  if the                                                                    
smoothing average was applied to  the past five years of the                                                                    
POMV draw, the  fund had performed less than  5 percent plus                                                                    
inflation. He  asked whether  the legislature  would respond                                                                    
as  if  it expected  ARMB  to  respond  and take  action  or                                                                    
whether the  legislature would take  no action  and continue                                                                    
taking 5 percent from the  fund despite lower returns in the                                                                    
past five years.                                                                                                                
                                                                                                                                
Representative  Hannan opposed  the amendment.  She believed                                                                    
the amendment pertained to the  next year's draw. She stated                                                                    
that  if it  was  a bill  addressing the  POMV  draw in  the                                                                    
statute  she would  probably  be in  favor  for the  reasons                                                                    
Representative Stapp  described. However, the change  in the                                                                    
amendment would  only go into  the operating budget  for one                                                                    
year and would not change the overall fiscal policy.                                                                            
                                                                                                                                
Representative  Galvin   agreed  with  statements   made  by                                                                    
Representative   Hannan.   She   would  like   to   have   a                                                                    
conversation  with the  Department of  Revenue. She  thought                                                                    
the  proposal  was  a  very  good  idea  and  something  the                                                                    
legislature  should consider  down  the road  with a  bigger                                                                    
conversation.                                                                                                                   
                                                                                                                                
5:51:02 PM                                                                                                                    
                                                                                                                                
Co-Chair Josephson saw some fiscal  wisdom in the amendment.                                                                    
He stated  that experts talked  about draws of 4.25  and 4.5                                                                    
percent. Unfortunately,  he could not consider  reducing the                                                                    
draw from 5 percent.                                                                                                            
                                                                                                                                
Representative Stapp WITHDREW Amendment 12.                                                                                     
                                                                                                                                
5:51:31 PM                                                                                                                    
                                                                                                                                
Co-Chair  Josephson RECESSED  the  meeting  until 7:30  p.m.                                                                    
[Note: the meeting never reconvened.]                                                                                           
                                                                                                                                
HB  53  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HB  55  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
5:52:08 PM                                                                                                                    
RECESSED                                                                                                                        
                                                                                                                                

Document Name Date/Time Subjects
HB 78 AML - HFIN Employer Considerations of State-Sponsored Pensions.pdf HFIN 4/2/2025 1:30:00 PM
HB 78 AML 2025-04-Actuarial-Amortization-Policy.pdf HFIN 4/2/2025 1:30:00 PM
HB 78
HB 78 DRB Tiers & Unfunded Liability April 2, 2025.pdf HFIN 4/2/2025 1:30:00 PM
HB 78