Legislature(2025 - 2026)GRUENBERG 120
02/17/2026 03:15 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB124 | |
| HB250 | |
| HB152 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 130 | TELECONFERENCED | |
| += | HB 250 | TELECONFERENCED | |
| += | HB 152 | TELECONFERENCED | |
| *+ | HB 278 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 124 | TELECONFERENCED | |
HB 124-AIDEA
3:19:29 PM
CHAIR CARRICK announced that the first order of business would
be HOUSE BILL NO. 124, "An Act relating to the Alaska Industrial
Development and Export Authority; and providing for an effective
date." [Before the committee, adopted as a working document on
2/5/26, was CS for HB 124, Version 34-LS0411\N, Walsh, 3/4/26,
and amendments were adopted on 2/12/26.]
3:20:20 PM
CHAIR CARRICK, as prime sponsor of HB 124, announced that the
committee would begin discussion of amendments to HB 124,
Version N, as amended, beginning with Amendment 8, which had
been moved and tabled on 2/12/26. She moved that Amendment 8 be
taken off the table. There being no objection, Amendment 8 was
before the committee. Amendment 8, labeled 34-LS0411|N.8,
Walsh, 2/5/26, read as follows:
Page 3, lines 19 - 28:
Delete all material.
Renumber the following bill sections accordingly.
3:20:52 PM
REPRESENTATIVE MCCABE spoke to Amendment 8. He explained that
it would delete Section 8. He explained that currently the
Alaska Industrial Development and Export Authority (AIDEA) can
keep its assets without being "raided" by the legislature if it
pays the required statutory dividend. He pointed out that under
Version N, as amended, AIDEA's assets would no longer be
separate from the state, and AIDEA could not keep any assets
over the threshold and must pay these funds along with the
statutory dividend to the legislature.
REPRESENTATIVE MCCABE cited a legal memorandum ("memo"), [from
Ian Walsh, Legislative Council, dated 2/17/26, included in the
committee file, which read as follows]:
You asked whether CSHB 124(STA)(Work Order No. 34-
LS0411\N) raises any legal issues. This bill raises
constitutional issues that are discussed below.
Requiring legislative confirmation of members of the
Alaska Industrial Development Authority (AIDEA) likely
violates the constitutional separation of powers
doctrine. Noting that separation of powers is
implicit in Alaska's Constitution, the Alaska Supreme
Court has explained that "[t]he doctrine prohibits one
branch from encroaching upon and exercising the powers
1
of another branch." The court further noted that the
"the appointment of subordinated executive officers is
2
an executive function." The Alaska Constitution vests
executive authority in the governor, so the governor
3
is ordinarily responsible for executive functions.In
specific circumstances the constitution permits the
executive appointment function to be augmented by the
4
legislature's confirmation power. Those circumstances
are not present here, however, because AIDEA is not a
principal department or quasi-judicial or regulatory
5
agency. Thus, requiring that the legislature confirm
the members of AIDEA likely violates the separation of
powers doctrine by encroaching on the executive's
appointment power.
Granting the presiding officers of the legislature the
authority to appoint members of AIDEA likely also
violates the separation of powers doctrine. As
explained above, the Alaska Constitution vests
executive authority in the governor, and appointment
of subordinate executive officers is an executive
function. By allowing the presiding officers of the
legislative branch to appoint public members of AIDEA,
the bill likely violates the separation of powers
doctrine because the legislature is involving itself
in executive functions. It also raises another
question: Who has authority to remove the members
appointed by the presiding officers? The governor?
The presiding officers themselves? The bill does not
address this issue, aside from removing language
specifying that the members serve "at the pleasure of
the governor." It will likely exacerbate the
separation of powers concern if the governor lacks the
authority to remove public members of AIDEA.
Related to AIDEA's finances, the limit on the value of
AIDEA's funds and accounts in bill sec. 9 is somewhat
novel. I am aware of only one other statute that
6
imposes a limit on the value of a fund. Like the limit
for AIDEA's funds in sec. 8, this other statute
7
provides that money in excess of the limit lapses.
There ae many other statutes governing lapsing money,
but those statutes ordinarily simply provide that
money lapses at the end of a specific period of time
(or does not lapse), without reference to a monetary
8
limit. I do not know how a court would evaluate the
limit in bill sec. 8, especially in the context of
AIDEA's unique statutory financial structure, as
explained further below.
AIDEA's governing statute, even as amended by this
bill, raises potential constitutional issues with
9
AIDEA's existing financial structure. First AS
44.88.190(b) provides that "funds, income, or receipts
of [AIDEA] may not be considered or constitute money
of the state." The text of this statute suggests that
the legislature may have intended to dedicate AIDEA's
money to AIDEA outside of the annual appropriations
process, because AIDEA's money would not be "money of
the state." This raises a potential constitutional
issue because state revenue generally may not be
earmarked by statute for predetermined purposes
10
outside of the annual appropriations process.
Instead, state revenue must be appropriated by the
1112
legislature each year. AIDEA is a public corporation
and likely an instrumentality of the state for the
13
purposes of the Alaska Constitution, so under the
dedicated funds clause, it is constitutionally suspect
for a statute to dedicated AIDEA's revenue to AIDEA
14
without appropriations. Additionally, the funds
established in AIDEA are revolving funds, meaning,
along with appropriated money, the funds consists of
income generated by AIDEA that has not been
15
appropriated by the legislature. The attorney general
has previously recognized that a revolving fund that
permits receipts generated by a state entity to go
directly into the fund and be used by that entity
without appropriation may also violate the
16
constitutional prohibition against dedicated funds. A
statute that unconstitutionally dedicates state
revenue for a predetermined purpose without
17
appropriation is unenforceable.
Finally, requiring approval of the Legislative Budget
and Audit Committee (LB&A) before AIDEA may expend
more than $100,000,000 on a project could potentially
violate the constitutional separation of powers
doctrine because it may be seen as requiring
legislative approval for executive action. The
executive branch has, for many years, taken the
position that requiring legislative approval for
executive action may be unconstitutional. I am not
aware of any approval requirement similar to the LB&A
approval requirements in this bill, and the
requirement is therefore untested. There are existing
requirements that state entities submit information to
19
LB&A, but these requirements do not generally give
LB&A a role in approving contracts or individual
contractors for the executive branch. This LB&A
approval requirement may be more likely to raise
constitutional concerns than the other legislative
approval requirements because, unlike legislative
approval obtained through a bill, approval by LB&A
20
would not be subject to the governor's veto power.
Note, however, that no controlling authority has
reached a definitive conclusion about the
constitutionality of legislative approval
21
requirements, especially in this unique context. It
would be much less likely to raise constitutional
concerns if this committee substitute instead required
AIDEA to submit the name of the proposed contractor to
LB&A or otherwise required AIDEA to submit particular
information relating to the independent feasibility
study to LB&A.
Please let me know if I may be of further assistance.
3:22:49 PM
CHAIR CARRICK explained that she opposed the amendment pointing
to an amendment to be introduced later which would address
Representative McCabe's concerns.
REPRESENTATIVE MCCABE made a request that legal memos be put on
BASIS so constituents could read them.
3:24:23 PM
CHAIR CARRICK maintained her objection.
A roll call vote was taken. Representatives Holland, McCabe,
and St. Clair voted in favor of Amendment 8. Representatives
Story, Himschoot, and Carrick voted against it. Therefore,
Amendment 8 failed to be adopted by a vote of 3-3.
3:25:21 PM
REPRESENTATIVE HOLLAND moved to adopt Amendment 20, labeled 34-
LS0411\N.17, Walsh, 2/11/26, which read as follows:
Page 1, line 1, following "Authority;":
Insert "creating the innovation-driven enterprise
investment fund; creating the innovation-driven
enterprise incubator grant program; creating the
innovation-driven enterprise incubator grant fund;
relating to the duties of the Department of Commerce,
Community, and Economic Development;"
Page 3, lines 19 - 28:
Delete all material.
Renumber the following bill sections accordingly.
Page 5, following line 11:
Insert a new bill section to read:
"* Sec. 10. AS 44.88.190(b) is amended to read:
(b) The funds, income, or receipts of the
authority may not be considered or constitute money of
the state except as provided in AS 44.88.205(c), nor
may real property in which the authority has an
interest be considered land owned in fee by the state
or to which the state may become entitled or in any
way land belonging to the state, or state land
referred to in art. VIII of the Alaska Constitution."
Renumber the following bill sections accordingly.
Page 6, following line 8:
Insert a new bill section to read:
"* Sec. 12. AS 44.88.205 is amended by adding a new
subsection to read:
(c) The legislature may appropriate the income
of the authority, including loan interest payments,
loan commitment fees, and income earned on assets of
the authority, as follows:
(1) 20 percent to the authority for the
purposes described in this chapter;
(2) five percent to the innovation-driven
enterprise investment fund established in
AS 44.88.860;
(3) one percent to the innovation-driven
enterprise incubator grant fund established in
AS 45.81.310; and
(4) 74 percent for other purposes the
legislature considers appropriate."
Renumber the following bill sections accordingly.
Page 7, following line 18:
Insert new bill sections to read:
"* Sec. 16. AS 44.88.600 is amended to read:
Sec. 44.88.600. Rural development initiative
fund. The rural development initiative fund is created
in the authority outside of the revolving fund. The
rural development initiative fund is a fund for the
uses and purposes of AS 44.88.600 - 44.88.620. The
rural development initiative fund consists of money or
assets appropriated or transferred to the authority
for the purposes of this section [,] and [OF] loan
repayments [, INTEREST, OR OTHER INCOME EARNED ON
LOANS OR INVESTMENTS OF THE FUND]. In addition, the
authority may deposit other assets into the fund if
the total value of those deposits does not exceed
$2,000,000. The authority, in its discretion, may
transfer money or other assets from the rural
development initiative fund to the revolving fund.
* Sec. 17. AS 44.88.660 is amended to read:
Sec. 44.88.660. Alaska Industrial Development and
Export Authority sustainable energy transmission and
supply development fund. The Alaska Industrial
Development and Export Authority sustainable energy
transmission and supply development fund is
established in the authority. The development fund
consists of appropriations made to the development
fund by the legislature, money or other assets
transferred to the development fund by a vote of the
members of the authority under AS 44.88.050 from any
other fund controlled by the authority, and
unrestricted loan repayments [, INTEREST, OR OTHER
INCOME EARNED ON LOANS, INVESTMENTS, OR ASSETS OF THE
DEVELOPMENT FUND]. The development fund is not an
account in the revolving fund established in
AS 44.88.060, and the authority shall account for the
development fund separately from the revolving fund.
The authority may create additional accounts in the
development fund. Subject to agreements made with the
holders of the authority's bonds or with other
persons, the authority may transfer amounts in an
account in the development fund to another account in
the development fund. Amounts deposited in the
development fund may be pledged to the payment of
bonds of the authority or expended for the purposes of
AS 44.88.650 - 44.88.690. The authority has the powers
and responsibilities established in AS 37.10.071 with
respect to the investment of amounts held in the
development fund.
* Sec. 18. AS 44.88.810 is amended to read:
Sec. 44.88.810. Arctic infrastructure development
fund. The Arctic infrastructure development fund is
established in the authority. The fund consists of
appropriations made to the fund by the legislature,
money or other assets transferred to the fund by a
majority vote of the members of the authority under
AS 44.88.050 from any other fund controlled by the
authority, and unrestricted loan repayments [,
INTEREST, OR OTHER INCOME EARNED ON LOANS,
INVESTMENTS, OR ASSETS OF THE FUND]. The fund is not
an account in the revolving fund established in
AS 44.88.060, and the authority shall account for the
fund separately from the revolving fund. The authority
may create additional accounts in the fund. Subject to
agreements made with the holders of the authority's
bonds or with other persons, the authority may
transfer amounts in an account in the fund to another
account in the fund. Amounts deposited in the fund may
be pledged to the payment of bonds of the authority or
expended for the purposes of AS 44.88.800 - 44.88.840.
The authority has the powers and responsibilities
established in AS 37.10.071 with respect to the
investment of amounts held in the fund.
* Sec. 19. AS 44.88 is amended by adding a new
section to read:
Article 11A. Innovation-Driven Enterprise Investments.
Sec. 44.88.860. Innovation-driven enterprise
investment fund. (a) The innovation-driven enterprise
investment fund is established in the authority. The
fund consists of appropriations made to the fund by
the legislature and unrestricted loan repayments. The
fund is not an account in the revolving fund
established in AS 44.88.060, and the authority shall
account for the fund separately from the revolving
fund. The authority may create additional accounts in
the fund. Subject to agreements made with the holders
of the authority's bonds or with other persons, the
authority may transfer amounts in an account in the
fund to another account in the fund. Except as
provided in (b) and (c) of this section, the authority
may not expend or transfer out of the fund the amounts
deposited in the fund. The authority has the powers
and responsibilities established in AS 37.10.071 with
respect to the investment of amounts held in the fund.
(b) The authority may expend amounts deposited
in the fund to invest in innovation-driven enterprises
in exchange for an ownership interest in the
enterprise, or an instrument that is convertible into
an ownership interest in the enterprise. The authority
may not invest more than $500,000 in a single
innovation-driven enterprise. To be eligible for
investment under this subsection, an innovation-driven
enterprise must
(1) have gross revenues not exceeding
$2,000,000 in any fiscal year before the date of
initial investment;
(2) be formally affiliated with, or have
received investment, programmatic support, or
admission from, a venture capital fund, incubator, or
accelerator that customarily supports early-stage
innovation companies, as evidenced by written
documentation; and
(3) maintain its principal place of
business in the state and conduct a substantial
portion of its management, product development, or
research activities within the state at the time of
initial investment.
(c) The authority may expend amounts deposited
in the fund to invest in venture capital funds that
focus primarily on investing in innovation-driven
enterprises. The authority may not invest more than
$2,500,000 in a single venture capital fund. To be
eligible for investment under this subsection, a
venture capital fund must primarily invest in
innovation-driven enterprises that meet the
requirements for investment under (b) of this section.
(d) The authority may not invest amounts
deposited in the fund in an innovation-driven
enterprise or venture capital fund that is a
successor, affiliate, or reorganization of an existing
entity formed to evade the limitations of this
section.
(e) In this section, "innovation-driven
enterprise"
(1) means a for-profit entity that, as its
primary activity, develops or materially improves a
novel product, service, or process intended for
commercial deployment and that devotes a substantial
portion of its operating expenditures or personnel to
research, development, engineering, or product design;
(2) does not include an entity primarily
engaged in real estate development, lodging, food
service, retail sales, resource extraction, or passive
investment.
* Sec. 20. AS 45.81 is amended by adding new
sections to read:
Article 4. Innovation-Driven Enterprise Incubator
Grants.
Sec. 45.81.300. Innovation-driven enterprise
incubator grant program. (a) An innovation-driven
enterprise incubator grant program is established in
the department for the purpose of funding incubator
and accelerator programs focused on supporting
innovation-driven enterprises in the state.
(b) An entity that provides an incubator or
accelerator program for innovation-driven enterprises
may apply to the department for a grant.
(c) The department may award a grant to an
incubator or accelerator program that primarily
supports innovation-driven enterprises that have
annual gross revenues not exceeding $2,000,000,
maintain their principal place of business in the
state, and conduct a substantial portion of
management, product development, or research
activities within the state.
Sec. 45.81.310. Innovation-driven enterprise
incubator grant fund. (a) The innovation-driven
enterprise incubator grant fund is established in the
department and consists of appropriations to the fund.
The legislature may appropriate to the fund income
earned on money in the fund.
(b) Money appropriated to the fund may be
expended by the department for innovation-driven
enterprise incubator grants under AS 45.81.300 without
further appropriation. Money in the fund does not
lapse and remains available for expenditure in
successive fiscal years.
Sec. 45.81.320. Regulations. The department may
adopt regulations under AS 44.62 (Administrative
Procedure Act) to implement AS 45.81.300 - 45.81.330.
Sec. 45.81.330. Definitions. In AS 45.81.300 -
45.81.330,
(1) "department" means the Department of
Commerce, Community, and Economic Development;
(2) "fund" means the innovation-driven
enterprise incubator grant fund established in
AS 45.81.310;
(3) "innovation-driven enterprise" has the
meaning given in AS 44.88.860."
Renumber the following bill sections accordingly.
Page 7, line 19:
Delete "AS 44.88.380 is"
Insert "AS 44.88.088 and 44.88.380 are"
REPRESENTATIVE HOLLAND explained that Amendment 20 has three
primary aspects. First is the removal of the three-billion-
dollar cap, identical to the previous discussion on Amendment 8.
Second, the amendment addresses the question of whether the net
income of AIDEA is or isn't available to the legislature for
appropriation. He said AIDEA and some of the current statutes
have suggested that income is shielded from the legislature.
The legal opinion from Legislative Legal Services and the
consistency of other corporations suggest that the income should
be available to the legislature for appropriation. This
amendment would clarify that the income from AIDEA would be
available to the legislature for appropriation and would repeal
those statutes that would be in conflict. The third part of the
amendment suggested that 20 percent of the net income would go
back to AIDEA to add to its corpus and to inflation-proof some
of the funds. In addition, it would specifically identify some
money to be appropriated into an innovation-driven enterprise
investment fund to invest in emerging businesses aligned with
Alaska's comprehensive economic development strategy and an
innovation-driven incubator grant program to fund startups.
This amendment seeks to address Alaska's stagnant economy. The
amendment is intended to align AIDEA with the Alaska
constitution as well as its statutory intent. That said,
Representative Holland recognized that the amendment's level of
specificity and the funding of the new investment funds and
innovation grant program might violate the confinement clause of
the Alaska constitution; therefore, he [moved] to withdraw the
amendment.
3:29:17 PM
CHAIR CARRICK announced that [there being no objection],
Amendment 20 was withdrawn.
3:29:40 PM
REPRESENTATIVE HOLLAND moved to adopt Amendment 17 to HB 124,
Version N, as amended, labeled 34-LS0411\N.18, Walsh, 2/10/26,
which read as follows:
Page 3, lines 19 - 28:
Delete all material.
Renumber the following bill sections accordingly.
Page 5, following line 11:
Insert a new bill section to read:
"* Sec. 10. AS 44.88.190(b) is amended to read:
(b) The funds, income, or receipts of the
authority may not be considered or constitute money of
the state except as provided in AS 44.88.205(c), nor
may real property in which the authority has an
interest be considered land owned in fee by the state
or to which the state may become entitled or in any
way land belonging to the state, or state land
referred to in art. VIII of the Alaska Constitution."
Renumber the following bill sections accordingly.
Page 6, following line 8:
Insert a new bill section to read:
"* Sec. 12. AS 44.88.205 is amended by adding a new
subsection to read:
(c) The legislature may appropriate the income
of the authority, including loan interest payments,
loan commitment fees, and income earned on assets of
the authority, as follows:
(1) 20 percent to the authority for the
purposes described in this chapter; and
(2) 80 percent for other purposes the
legislature considers appropriate."
Renumber the following bill sections accordingly.
Page 7, following line 18:
Insert new bill sections to read:
"* Sec. 16. AS 44.88.600 is amended to read:
Sec. 44.88.600. Rural development initiative
fund. The rural development initiative fund is created
in the authority outside of the revolving fund. The
rural development initiative fund is a fund for the
uses and purposes of AS 44.88.600 - 44.88.620. The
rural development initiative fund consists of money or
assets appropriated or transferred to the authority
for the purposes of this section [,] and [OF] loan
repayments [, INTEREST, OR OTHER INCOME EARNED ON
LOANS OR INVESTMENTS OF THE FUND]. In addition, the
authority may deposit other assets into the fund if
the total value of those deposits does not exceed
$2,000,000. The authority, in its discretion, may
transfer money or other assets from the rural
development initiative fund to the revolving fund.
* Sec. 17. AS 44.88.660 is amended to read:
Sec. 44.88.660. Alaska Industrial Development and
Export Authority sustainable energy transmission and
supply development fund. The Alaska Industrial
Development and Export Authority sustainable energy
transmission and supply development fund is
established in the authority. The development fund
consists of appropriations made to the development
fund by the legislature, money or other assets
transferred to the development fund by a vote of the
members of the authority under AS 44.88.050 from any
other fund controlled by the authority, and
unrestricted loan repayments [, INTEREST, OR OTHER
INCOME EARNED ON LOANS, INVESTMENTS, OR ASSETS OF THE
DEVELOPMENT FUND]. The development fund is not an
account in the revolving fund established in
AS 44.88.060, and the authority shall account for the
development fund separately from the revolving fund.
The authority may create additional accounts in the
development fund. Subject to agreements made with the
holders of the authority's bonds or with other
persons, the authority may transfer amounts in an
account in the development fund to another account in
the development fund. Amounts deposited in the
development fund may be pledged to the payment of
bonds of the authority or expended for the purposes of
AS 44.88.650 - 44.88.690. The authority has the powers
and responsibilities established in AS 37.10.071 with
respect to the investment of amounts held in the
development fund.
* Sec. 18. AS 44.88.810 is amended to read:
Sec. 44.88.810. Arctic infrastructure development
fund. The Arctic infrastructure development fund is
established in the authority. The fund consists of
appropriations made to the fund by the legislature,
money or other assets transferred to the fund by a
majority vote of the members of the authority under
AS 44.88.050 from any other fund controlled by the
authority, and unrestricted loan repayments [,
INTEREST, OR OTHER INCOME EARNED ON LOANS,
INVESTMENTS, OR ASSETS OF THE FUND]. The fund is not
an account in the revolving fund established in
AS 44.88.060, and the authority shall account for the
fund separately from the revolving fund. The authority
may create additional accounts in the fund. Subject to
agreements made with the holders of the authority's
bonds or with other persons, the authority may
transfer amounts in an account in the fund to another
account in the fund. Amounts deposited in the fund may
be pledged to the payment of bonds of the authority or
expended for the purposes of AS 44.88.800 - 44.88.840.
The authority has the powers and responsibilities
established in AS 37.10.071 with respect to the
investment of amounts held in the fund."
Renumber the following bill sections accordingly.
Page 7, line 19:
Delete "AS 44.88.380 is"
Insert "AS 44.88.088 and 44.88.380 are"
REPRESENTATIVE MCCABE objected.
REPRESENTATIVE HOLLAND stated that most of his previous
description regarding Amendment 20 applied to Amendment 17,
which would remove the cap and identified that the net income of
AIDEA is subject to full legislative appropriation and includes
the budgeting allocation of 20 percent of that revenue back to
AIDEA. However, the amendment would not fund the innovation
grant program or the economic development fund.
3:30:50 PM
The committee took a brief at-ease at 3:30 p.m.
3:31:01 PM
CHAIR CARRICK moved to adopt Conceptual Amendment 1 to Amendment
17, to delete reference to AS 44.88.380, found on page 3, line
29 [as numbered on Amendment 17]. Chair Carrick then objected
to the amendment for the purpose of discussion. She explained
that AS 44.88.380 was the employee liability section which had
been removed from the bill with Amendment 13 [adopted on
2/12/26]. If the underlying Amendment 17 passed without the
conceptual amendment, language which the committee had already
removed would be added back. The amendment would then conform
to the previous work of the committee. She stated that removing
this language from the amendment would ensure that the language
would be removed from the bill if Amendment 17 were adopted. In
response to a question from Representative Holland, Chair
Carrick confirmed that the other statute mentioned on that line,
AS 44.88.088, would remain in Amendment 17.
3:32:26 PM
CHAIR CARRICK removed her objection to Conceptual Amendment 1 to
Amendment 17. There being no further objection, Conceptual
Amendment 1 to Amendment 17 was adopted.
3:33:08 PM
CHAIR CARRICK returned to consideration of Amendment 17, as
amended.
REPRESENTATIVE MCCABE stated that Amendment 17, as amended, was
unconstitutional. He noted that money could not be taken from
the executive branch in this manner. He pointed out that if
money could be taken from AIDEA in this way, it could also be
taken from the Alaska Railroad Corporation (ARRC), the Alaska
Housing Finance Corporation (AHFC), or the permanent fund. He
commented that no other public corporation is being capped,
micromanaged, or structured in this way. He pointed out the
types of projects AIDEA already supports and posed that there
was an underlying agenda.
3:36:03 PM
REPRESENTATIVE HOLLAND said to be clear this amendment does not
take away any of AIDEA's corpus; it is removing the cap. He
said the second issue is regarding the legislature appropriating
money from AIDEA. He asked the committee to refer to the legal
memo [included in the committee file] and for Legislative Legal
Services to comment on it.
3:37:04 PM
CHAIR CARRICK asked Ian Walsh to comment on the legal memo.
3:37:19 PM
IAN WALSH, Legislative Council, Legislative Legal Services,
Legislative Affairs Agency, stated it is a multi-faceted
question. He said AIDEA is a public corporation, and it is a
likely an instrumentality of the state for the purposes of the
Alaska Constitution. The Alaska Constitution restrictions would
apply to the legislature's governance of AIDEA. The
constitution has a dedicated funds clause which prohibits them
from dedicating state revenue for particular purposes with very
limited exceptions. The purpose was to allow the legislature
and governor to determine funding on an annual basis. The
statutes that govern AIDEA would seem to violate the purpose and
the dedicated funds clause. It is important to note the
railroad is not subject to the state appropriation process due
to federal law.
3:39:40 PM
REPRESENTATIVE ST. CLAIR said the state is getting into the
weeds of a successful organization. He suggested the committee
"leave it alone" as AIDEA is creating growth in the state.
3:40:48 PM
REPRESENTATIVE MCCABE asked if Executive Director Ruaro could
share legal advice that is different from that of Mr. Walsh.
3:41:38 PM
RANDY RUARO, Executive Director, AIDEA, stated that the Alaska
Supreme Court addressed the issue of the legislature's
delegation authority in the 1962 DeArmond case. He said that
AIDEA funds are not subject to appropriation. He asked whether
the legislature had the power to exempt public corporations and
separate them from their authority. He discussed impacts and
protection of earnings. He stated that AIDEA believes the
DeArmond case is still good law.
3:44:10 PM
CHAIR CARRICK noted conflicting opinions of the interpretation
of this amendment and its legality.
MR. WALSH responded to Mr. Ruaro that the DeArmond case did not
involve a challenge to the dedicated funds clause [Article IX,
Section 7 of the Alaska Constitution]. In 1982, the attorney
general interpreted the dedicated funds clause to apply to all
public corporations.
3:46:10 PM
CHAIR CARRICK said it seemed to be in uncharted legal territory.
This amendment addresses primary objection to a cap on the fund.
She maintains support as sponsor of the bill.
REPRESENTATIVE MCCABE maintained his objection.
3:48:01 PM
A roll call vote was taken. Representatives Story, Himschoot,
Holland, and Carrick voted in favor of Amendment 17, as amended.
Representatives St. Clair, McCabe, and Vance voted against it.
Therefore, Amendment 17, as amended, was adopted by a vote of 4-
3.
3:48:57 PM
REPRESENTATIVE HOLLAND withdrew Amendment 18 to HB 124.
3:49:17 PM
REPRESENTATIVE HOLLAND moved to adopt Amendment 19 to HB 124,
Version N, as amended, labeled 34-LS0411\N.19, Walsh, 2/10/26,
which read as follows:
Page 3, lines 7 - 8:
Delete "written responses to public comments"
Insert "all public comments received in writing,
with personally identifiable information redacted"
Page 4, lines 4 - 7:
Delete all material.
Renumber the following paragraphs accordingly.
Page 5, line 1:
Delete "(1) - (4)"
Insert "(1) - (3)"
Page 5, line 7, following "ownership":
Insert "interest"
Page 5, line 8, following "in":
Insert ", or receives an economic benefit from,"
Page 5, line 9, following "lease.":
Insert "An interest is indirect under this
subsection if the interest is held on behalf of the
member through an intermediary, trust, or other
arrangement, if the member receives a financial
benefit from the interest, if the member exercises
control of the interest through another individual or
entity, or if the interest is held by an immediate
family member."
REPRESENTATIVE ST. CLAIR objected.
REPRESENTATIVE HOLLAND spoke to Amendment 19 as trying to find a
balance in working with AIDEA. This amendment retains the
publication of public comments without personal information but
removes the requirement to respond. It also clarifies the
conflict of interest.
3:50:59 PM
REPRESENTATIVE MCCABE asked why the legislature would want to
redact information. This is a public process. He gave examples
of his own public comments. He said this violates the public
process.
3:52:22 PM
CHAIR CARRICK stated that she is curious about the same
question. She asked if the sponsor would be open to an
amendment and change it to contact information only.
REPRESENTATIVE HOLLAND agreed and said she would prefer to
follow typical public processes.
3:54:00 PM
REPRESENTATIVE STORY asked if there was redacted information on
public comments today.
CHAIR CARRICK asked Mr. Walsh if he had a suggestion for an
amendment to standard practices.
3:54:24 PM
MR. WALSH replied that he doesn't know what language would be
used to capture this. He would have to get back to the
committee.
3:55:01 PM
REPRESENTATIVE ST. CLAIR stated this is supposed to be a
transparency bill. The same standard needs to be applied to
public comments. Without the conceptual amendment, he opposes
this.
3:55:49 PM
CHAIR CARRICK moved to adopt Conceptual Amendment 1 to Amendment
19, on page 1, lines 3 and 4 [as numbered in Amendment 19],
between "with" and "information" to delete "personally
identifiable" and insert "personal contact".
REPRESENTATIVE ST. CLAIR objected. He questioned whether that
is standard language.
CHAIR CARRICK said it is not, but her intent is to "get us a
little bit closer to the intent of the sponsor of the
amendment."
REPRESENTATIVE ST. CLAIR maintained his objection.
3:57:04 PM
REPRESENTATIVE MCCABE said he would like to ask the bill drafter
what the common practice is in terms of redacting information.
3:58:15 PM
MR. WALSH responded that he does not have the policy related to
committee documents at his fingertips and does not typically
provide advice in this realm of legislative procedure.
Notwithstanding that, he said he would get back to the committee
with information.
3:58:56 PM
REPRESENTATIVE VANCE asked Mr. Walsh if he is aware of this type
of prescriptive language regarding other public corporations.
MR. WALSH answered that he is not aware of this specific
language, either in the conceptual or underlying amendment, but
he knows that most other corporations are subject to the Public
Records Act.
REPRESENTATIVE VANCE explained her thought that "going down this
road of prescribing every little nuance on this public comment"
is, perhaps, not the best direction in the attempt to offer
guidance.
4:01:00 PM
REPRESENTATIVE ST. CLAIR maintained his objection.
A roll call vote was taken. Representatives Holland, Story,
Himschoot, and Carrick voted in favor of Conceptual Amendment 1
to Amendment 19. Representatives Vance, McCabe, and St. Clair
voted against it. Therefore, Conceptual Amendment 1 to
Amendment 19 was adopted by a vote of 4-3.
4:02:33 PM
REPRESENTATIVE VANCE asked the sponsor of the amendment to
clarify the conflict-of-interest portion.
4:03:09 PM
REPRESENTATIVE HOLLAND provides clarification on what is meant
by having an interest and direct interest in terms of primary
function of this section of the bill. If a member is benefiting
from the action being taken, the member cannot vote.
4:04:51 PM
REPRESENTATIVE VANCE asked if board members were already not
required to confirm conflicts of interest.
4:05:06 PM
REPRESENTATIVE HOLLAND answered that he wouldn't want to speak
about current limitations. This section is trying to provide
some additional clarifications. He would defer to Mr. Ruaro if
there is policy.
4:06:10 PM
CHAIR CARRICK currently in statute, AIDEA members cannot vote in
direct interest.
REPRESENTATIVE VANCE asked what "or other arrangement" meant.
4:07:38 PM
MR. RUARO stated currently there is the AIDEA statute that
addresses direct interest. The executive director's branch
Ethics Act applies to board members. He stated if this language
was adopted, there might be another standard. It might be best
to stick with what is in the statutes and Ethics Act.
4:09:01 PM
REPRESENTATIVE HOLLAND summarized this amendment removes the
onerous requirement that AIDEA must respond to all public
comments. The second part is if an AIDEA board member has
indirect interest and a financial benefit, then that member
should not vote.
4:10:26 PM
CHAIR CARRICK affirmed that the objection is maintained.
A roll call vote was taken. Representatives Himschoot, Holland,
Story, and Carrick voted in favor of Amendment 19, as amended.
Representatives Vance, McCabe, and St. Clair voted against it.
The amendment was passed by a vote of 4-3.
4:11:17 PM
The committee took a brief at-ease at 4:11 p.m.
4:11:55 PM
CHAIR CARRICK indicated that the previous motion had not
specified that Amendment 19 [had been amended], and asked that
the roll be called again.
A roll call vote was taken. Representatives Himschoot, Holland,
Story, and Carrick voted in favor of Amendment 19, as amended.
Representatives Vance, McCabe, and St. Clair voted against it.
The amendment was passed by a vote of 4-3.
4:13:37 PM
REPRESENTATIVE ST. CLAIR said he doesn't like the bill; it is
unnecessary. He said he would recommend "do not pass" [on the
committee report].
4:13:59 PM
REPRESENTATIVE MCCABE said that he would focus on two issues.
Legislature confirmation of board members would be an executive
function. The bill also eliminates the removal ability of the
governor. The Legislative Budget and Audit Committee create a
legislature budget structure. These are separation of powers
issues and violating the constitution.
4:16:06 PM
CHAIR CARRICK said this is the first committee of referral. The
bill goes from this committee to the House Finance Committee.
4:16:32 PM
REPRESENTATIVE VANCE said her constituents voiced concerns about
public testimony and transparency. She noted that AIDEA is
making strides in community engagement. She feels that this
bill goes too far beyond the public engagement concerns.
4:18:05 PM
REPRESENTATIVE STORY commented AIDEA is a public corporation.
She is trying to build public confidence in this corporation.
She sees adding seats and other things will make AIDEA stronger.
She will be supporting the bill.
4:19:23 PM
CHAIR CARRICK said that she appreciates the committee for robust
discussion. She said AIDEA performs lots of good work in the
state but has been in the news for transparency issues. This
bill will give better governance for AIDEA. The amendment
process addressed concerns of the committee and AIDEA. She
summarized the changes in the bill. Through this process, the
committee has created a stronger bill.
4:22:14 PM
REPRESENTATIVE STORY moved to report CSHB 124, Version 34-
LS0411\N, Walsh, 3/4/26, as amended, out of committee with
individual recommendations and the accompanying fiscal notes and
to give Legislative Legal Services permission to make any
necessary technical and conforming changes.
4:22:38 PM
REPRESENTATIVE MCCABE objected. He asked a procedural question.
4:22:51 PM
The committee took a brief at-ease from 4:22 p.m. to 4:23 p.m.
4:23:35 PM
A roll call vote was taken. Representatives Story, Himschoot,
Holland, and Carrick voted in favor of the motion to report CSHB
124, Version 34-LS0411\N, Walsh, 3/4/26, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes. Representatives Vance, McCabe, and St. Clair
voted against it. Therefore, CSHB 124(STA) was adopted out of
the House State Affairs Standing Committee by a vote of 4-3.