HOUSE FINANCE COMMITTEE March 9, 2026 1:36 p.m. 1:36:29 PM CALL TO ORDER Co-Chair Foster called the House Finance Committee meeting to order at 1:36 p.m. MEMBERS PRESENT Representative Neal Foster, Co-Chair Representative Andy Josephson, Co-Chair Representative Calvin Schrage, Co-Chair Representative Jeremy Bynum Representative Alyse Galvin Representative Sara Hannan Representative Nellie Unangiq Jimmie Representative Elexie Moore Representative Frank Tomaszewski MEMBERS ABSENT Representative Jamie Allard Representative Will Stapp ALSO PRESENT Brodie Anderson, Staff, Representative Neal Foster; David Dunsmore, Staff, Senator Bill Wielechowski; Caroline Hamp, Staff, Representative Calvin Schrage; Alexei Painter, Director, Legislative Finance Division; David Jiang, Staff, Representative Alyse Galvin; Connor Bell, Fiscal Analyst, Legislative Finance Division; Keenan Miller, Staff, Representative Nellie Jimmie. SUMMARY HB 263 APPROP: OPERATING BUDGET;AMEND;SUPP HB 263 was HEARD and HELD in committee for further consideration. HB 265 APPROP: MENTAL HEALTH BUDGET HB 265 was HEARD and HELD in committee for further consideration. CSSB 64(FIN) am ELECTIONS CSSB 64(FIN) am was HEARD and HELD in committee for further consideration. SUBCOMMITTEE CLOSEOUT REPORTS: DEPARTMENT OF MILITARY AND VETERANS AFFAIRS DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT DEPARTMENT OF NATURAL RESOURCES JUDICIARY DEPARTMENT OF PUBLIC SAFETY DEPARTMENT OF FISH AND GAME DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT Co-Chair Foster reviewed the meeting agenda. CS FOR SENATE BILL NO. 64(FIN) am "An Act relating to elections; relating to voters; relating to voting; relating to voter registration; relating to election administration; relating to the Alaska Public Offices Commission; relating to campaign contributions; relating to the crimes of unlawful interference with voting in the first degree, unlawful interference with an election, and election official misconduct; relating to synthetic media in electioneering communications; relating to campaign signs; relating to voter registration on permanent fund dividend applications; relating to the Redistricting Board; relating to the duties of the commissioner of revenue; and providing for an effective date." 1:38:00 PM Co-Chair Schrage MOVED to ADOPT the proposed committee substitute for CSSB 64(FIN) am, Work Draft 34-LS0153\R (Dunmire, 3/6/26). Co-Chair Foster OBJECTED for explanation purposes. 1:38:28 PM BRODIE ANDERSON, STAFF, REPRESENTATIVE NEAL FOSTER, explained that he would walk the committee through the changes made in the committee substitute (CS). He stated that the easiest way for members to follow the changes would be to have two documents in front of them: the redline version showing changes from version U to version R, and the clean version R of the bill (copies on file). He would primarily reference the redline document and identify the corresponding page and line numbers in the bill. Mr. Anderson began with the first change on page 2 of the redline document, specifically lines 16 and 17. He explained that the same change appeared in the bill on page 2, lines 16 and 17. He noted that the language "except for when provided in the statute reference" had been added and that the term "personally identifiable" had been replaced with "confidential." He stated that the change addressed what information could be provided by the Department of Revenue (DOR). Co-Chair Foster asked Mr. Anderson to briefly explain the reason for the change on lines 16 and 17. Mr. Anderson responded that he would defer to Mr. David Dunsmore for the explanation. DAVID DUNSMORE, STAFF, SENATOR BILL WIELECHOWSKI, explained that the change clarified that individuals registering to vote through the Permanent Fund Dividend (PFD) application would still have their names included on the publicly available voter list. He noted that there had been concern that the phrase "personally identifiable" might create ambiguity and could potentially include a voter's name. The language was revised at the request of the Division of Elections (DOE) to ensure that standard voter information would remain publicly available while confidential information would remain protected. Mr. Anderson moved to the next change on page 5 of the redline document, which corresponded to page 5, line 15 of the bill. He stated that on line 16 of the redline, the phrase "to the extent possible" had been added. The language applied to the process of reviewing voter registration records and updating the master voter registry. He explained that the change clarified that DOE should work with other agencies when reviewing voter registration records to the extent possible. The agencies listed included the United States Postal Service (USPS), the Safeguard American Voter Eligibility (SAVE) program, and other agencies. 1:43:14 PM Co-Chair Josephson asked what practical effect the phrase "to the extent possible" would have. He suggested that it might allow DOE to respond to complaints by stating that it had used available systems only as time permitted. Mr. Dunsmore responded that the intent of the language was to add clarity. He relayed that DOE had expressed concern that some of the data sources listed in the bill might not be available in every state or jurisdiction. For example, certain property or sales tax records and jury duty records might not exist or might not be accessible in all areas. The phrase ensured that the division would not be required by law to consult data sources that were unavailable. Co-Chair Josephson asked whether the inclusion of the language also reflected the fact that election administration operated on strict timelines and that the division needed flexibility in order to meet election deadlines. Mr. Dunsmore responded that the timeline could be a consideration as well. He explained that Section 8 addressed the records that would be consulted during the voter roll cleanup process. He relayed that AS 15.07.130(a) related to who would receive voter notices during the cleanup process. He noted that the cleanup process occurred annually in January, and the subsection simply added a list of data sources that could be consulted during the review. Co-Chair Josephson noted that the subsection [AS 15.07.130(a)] appeared to be new. He asked whether the state had ever previously linked voter eligibility screening to a federal database used to verify citizenship. Mr. Dunsmore responded that he believed the answer was no. He clarified that the subsection only identified data sources that could be consulted during the review process. The criteria that would trigger a voter roll cleanup notice was located later in the bill, specifically in Section 4. If a voter did not meet the criteria, the individual would not receive a notice related to voter roll cleanup. Mr. Dunsmore noted that Co-Chair Josephson's question appeared to reference SAVE. He explained that a negative query result from the SAVE database alone would not result in a voter being removed from the voter rolls. He stated that if a query produced information suggesting that a voter might be deceased, DOE could investigate further. In the case of a death, the division might attempt to locate a death certificate or other documentation before removing the individual from the voter rolls. He emphasized that the query result itself would not directly affect a voter's registration status. 1:47:35 PM Co-Chair Josephson stated that he had recently read an article in the Alaska Beacon describing situations in states such as Missouri and Texas where voters had been removed from the rolls following database queries without an initial corrective process. He asked whether Alaska's approach would differ and whether the first administrative action in Alaska would avoid directly removing voters. Mr. Dunsmore responded that Alaska's process would differ. He explained that the bill would not change the existing grounds for removing a voter from the registration rolls or initiating the voter roll cleanup process. The procedures would continue to be governed by state law and the National Voter Registration Act of 1993. He stated that voters could only be removed for specific reasons already recognized under law, such as a voter's death, a voter registering or voting in another state, or a felony conviction involving moral turpitude. Other indicators, such as evidence suggesting residency in another state, would trigger a notification process rather than immediate removal. The voter would receive a notification and have the opportunity to confirm that they wished to remain registered in Alaska. He reiterated that the bill would not authorize immediate removal of voters in the manner described in the reports from other states. Representative Bynum remarked that the phrase "to the extent possible" appeared straightforward and he understood it had been added because DOE had requested clarity. He asked whether any legal analysis had been conducted to evaluate the potential legal effect of the phrase beyond its inclusion in statute. Mr. Dunsmore responded that no separate legal evaluation had been requested beyond the drafting process. When the bill was prepared, the policy rationale for the language had been communicated to Legislative Legal Services (LLS), and the language had been drafted accordingly. Representative Bynum asked whether the committee could request LLS to conduct a brief review and provide an opinion regarding the language at a later time. Mr. Dunsmore agreed to submit the request through LLS. 1:50:55 PM Mr. Anderson directed the committee to the next change on page 6, line 1 of the redline document and page 5, line 30 of the bill. The language changed the reporting deadline from February 1 to April 1 for the report related to the recent audit. Representative Bynum asked for a brief explanation of the reason for the change in the reporting deadline. Mr. Dunsmore responded that the report would require DOE to hire an outside subject matter expert to audit the division's voter roll cleanup processes and provide a report to the legislature. He relayed that the division expressed concern that the original February reporting deadline was too soon after the January voter roll cleanup process. He reported that the timeline was adjusted to April to allow adequate time to complete the audit and to ensure that the legislature would have more than a month remaining in the legislative session to consider any recommendations requiring legislative action. Mr. Anderson directed the committee to additional changes on page 6 of the redline document. He explained that beginning on page 6, line 17, the bill included a conforming change that created multiple subsections instead of a single section. The change corresponded with language appearing later on page 6, lines 27 through 30 of the redline, which could be found in the bill on page 6, lines 25 through 28. He reported that the new language allowed DOE to delay the publication of a data breach if law enforcement agencies thought that public disclosure could impede an ongoing investigation. Mr. Anderson directed the committee to page 8 of the redline document. He reported that the bill included several technical conforming changes beginning on lines 21 through 27. He stated that the definition of acceptable proof of identification for voter registration cards was modified on line 21 of the redline, which corresponded to page 8, lines 20 through 24 of the bill. Several items previously accepted as proof of identity would be deleted, including utility bills, bank statements, paychecks, and government checks, thereby narrowing the range of materials that could be used as identification for voter registration. 1:54:38 PM Co-Chair Josephson noted that hunting and fishing licenses were also removed from the list of acceptable identification. He asked Mr. Dunsmore whether the licenses could still be considered valid forms of identification if they were issued after presenting other valid identification. Mr. Dunsmore responded that, to the extent a hunting or fishing license functioned as a state identification card, it could still fall within the category of government- issued identification. He explained that the concern that prompted the change was that hunting and fishing licenses were sometimes issued through private businesses rather than directly by government agencies. He stated that the purpose of the change was to limit acceptable documentation issued directly by government agencies. Mr. Anderson added that a similar change regarding acceptable documentation materials appeared later in the bill in Section 18 on page 10. The reasoning for the change was similar to why the definition of acceptable material had changed. Mr. Anderson directed the committee to page 10 of the redline document, beginning on page 10, lines 3 and 4 of the redline, which corresponded to page 9, line 31 of the bill. The change included deletions and revisions relating to the testing official or witness. He explained that the language was added for clarification to ensure that a witness signature remained on the envelope. The revision addressed a request for additional clarification and served as a conforming change within the bill. Mr. Anderson directed the committee to page 10, lines 19 through 25 of the redline document, which corresponded to Section 18 of the bill. The language addressed the types of identification documents that would be accepted for voter registration. He stated that the section further defined and narrowed the list of acceptable documents used to verify voter identity. Mr. Anderson moved to page 12 of the redline document, lines 16 and 17, which corresponded to page 12, lines 11 and 12 of the bill. He explained that the language added clarification stating that a voter must provide either the voter's signature or the signature of an attesting official or witness. He stated that the purpose of the change was to clarify that ballots could still be cured if a witness signature was missing. He directed attention further down page 12 to lines 26 through 27 of the redline document, which corresponded to page 12, lines 21 through 22 of the bill. He explained that the language clarified that notices sent during the ballot cure process must be mailed to the voter's mailing address rather than any other address that might appear on the voter's record. Co-Chair Josephson asked whether the change related to a previously reported situation in Fairbanks. He relayed that an individual did not receive a ballot because the address associated with a PFD application differed from the individual's current location. He asked if the language was intended to ensure that only the designated mailing address would be used regardless of other addresses on file. Mr. Dunsmore responded that the change was not related to the situation in Fairbanks. He explained that the language applied specifically to the ballot curing process conducted by DOE. When the division reviewed a ballot and identified a curable deficiency, the division was required to send a notice to the voter within 24 hours. He stated that the change clarified that the notice must be sent to the voter's mailing address if it differed from the voter's residence address. For example, a voter might maintain a post office box in addition to a residence address. 2:00:01 PM Mr. Anderson directed the committee to page 13 of the redline document, beginning at line 17 and continuing through page 14, lines 1 and 2. He explained that an entire section related to procedures for counting ballots during a recount was deleted. Co-Chair Foster asked Mr. Dunsmore to explain the reason for removing the section. He noted that the section had been previously added and was now being removed. Mr. Dunsmore responded that the provision had originated in a governor's bill. He explained that DOE had sought to clarify an existing statutory requirement regarding whether ballots received after a deadline should be counted during a recount. The provision was being removed from the CS after a legislator raised concerns that repealing the existing statute could create ambiguity about which ballots should be counted in a recount. He explained that retaining the existing statutory language would preserve clear guidance on recount procedures. Co-Chair Josephson asked for confirmation that the bill had not made any changes to existing ballot timelines, including the 15-day window for absentee ballots submitted from outside Alaska. Mr. Dunsmore confirmed that the current deadlines required ballots mailed domestically to arrive within 10 days after the election, and ballots mailed from outside the U.S. to arrive within 15 days. He explained that the bill included a provision to establish a uniform 10-day deadline for all ballots, which would allow election results to be certified five days sooner. Historically, very few valid ballots arrived during the 10 to 15 day window because ballots still needed to be postmarked by election day. 2:02:40 PM Representative Hannan asked whether ballots arriving within the 10 to 15 day window would still be considered valid or whether the bill would shorten the return deadline for international absentee ballots. Mr. Dunsmore responded that the bill would shorten the deadline and establish a uniform 10-day return period for all absentee ballots, including those from outside the country. Mr. Anderson directed the committee to page 17 of the redline document, beginning at lines 3 through 5, which corresponded to page 16, lines 15 and 16 of the bill. He explained that the change revised the reporting deadline to the legislature from November 1, 2026, to the first day of the regular legislative session. He stated that the revised timing aligned with standard reporting practices and allowed additional time for DOE to compile accurate data following the election. Mr. Anderson continued to page 17, lines 18 through 31 of the redline document, corresponding to page 16, lines 25 through 31 of the bill. He explained that the language addressed applicability provisions and reflected conforming changes resulting from the deletion of a prior section of the bill. The revisions ensured that all remaining sections continued to apply appropriately. He concluded his overview of the changes. 2:05:46 PM Representative Jimmie expressed concern that the SAVE system was operated with involvement from private tech companies such as Palantir. She asked whether any confirmation had been obtained regarding whether the private companies could access Alaskan's voter data. Mr. Dunsmore responded that he had been researching the privacy concerns regarding the database. He explained that SAVE was included in the bill because access to a database that could be queried would be useful to the state. He noted that there had been concerns that using the database might require the state to share sensitive voter information. He offered reassurance that the sponsor wanted to work with the committee to ensure that personal information was not being compromised. Representative Jimmie understood that SAVE kept all records for every query for 10 years. She asked what information was retained by the federal government when Alaska queried SAVE and what were they allowed to do with the data. Mr. Dunsmore responded that querying the database would require certain identifying information, including a voter's name, date of birth, and Social Security number. In many cases, DOE might not have Social Security numbers for a large portion of voters, which could limit the ability to query the system. He stated that it remained unclear what specific data the federal government retained from the queries and how the information was used. He noted that the system was operated by U.S. Citizenship and Immigration Services, which was responsible for processing citizenship and naturalization matters, and that the agency had taken on an expanded role through management of the database. He reiterated that the scope of retained query data was not fully understood. 2:08:46 PM Co-Chair Foster WITHDREW the OBJECTION. There being NO further OBJECTION, Work Draft 34-LS0153\R was ADOPTED. CSSB 64(FIN) am was HEARD and HELD in committee for further consideration. Co-Chair Foster announced that the amendment deadline for the bill would be Friday, March 13, at 5:00 p.m. 2:10:07 PM AT EASE 2:11:15 PM RECONVENED Co-Chair Josephson began chairing the meeting. He explained that the committee would continue hearing finance subcommittee closeouts. HOUSE BILL NO. 263 "An Act making appropriations for the operating and loan program expenses of state government and for certain programs; capitalizing funds; amending appropriations; making supplemental appropriations; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." HOUSE BILL NO. 265 "An Act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program; and providing for an effective date." ^SUBCOMMITTEE CLOSEOUT REPORTS 2:12:26 PM ^DEPARTMENT OF MILITARY AND VETERANS AFFAIRS 2:12:31 PM Mr. Anderson reviewed the finance subcommittee recommendations for the Department of Military and Veterans Affairs (copy on file): RECOMMENDATIONS: The House Finance Budget Subcommittee for the Department of Military and Veterans Affairs submits the following recommended operating budget for FY2027 to the House Finance Committee: Fund Source: (dollars are in thousands) Unrestricted General Funds (UGF) $18,554.4 Designated General Funds (DGF) $ 1.1 Other Funds $14,812.5 Federal Funds $36,379.8 Total $69,747.8 The Unrestricted General Fund difference from FY27 Adjusted Base/House Committee Substitute 1 to the House Subcommittee budget recommendation is an increase of $29.0 of Unrestricted General Funds, which is .2% above the FY27 Adjusted Base. Positions: Permanent Full-time 286 Permanent Part-time 0 Temporary 3 Total 286 BUDGET ACTION: The House Finance Budget Subcommittee for the Department of Military and Veterans Affairs reviewed the FY2027 Governor's budget request, including amendments, and recommended the following actions: 1) Accept the Department's transaction for Office of the Commissioner, adding two Program Managers for Public Protection and Infrastructure Support. This includes the following items: • $318.6 thousand Federal Receipts. • 2 Permanent Full-time positions 2) Approve the transactions for Information Technology Classification Study Implementation: • $49.0 thousand in the Office of the Commissioner - $16.3 thousand UGF, the rest in Fed and Other funds. - $25.5 thousand in Homeland Security and Emergency Management -- $12.7 thousand UGF, the rest in CIP Receipt 3) Accept the Department's transaction for Army Guard Facilities Maintenance, adding two Environmental Program Specialists Positions for Hazardous Waste and Water Resource Management. This includes the following items: • $ 252.2 thousand Federal Receipts. • 2 Permanent Full-time positions 4) Approve the decrement of $27.4 DGF in Army Guard Facilities Maintenance due to uncollected rental fees. ATTACHED REPORTS: The House Finance Budget Subcommittee for the Department of Military and Veterans Affairs adopts the attached report: • The House Finance Subcommittee for the Department of Military and Veterans Affairs Budget Action Report 2:16:20 PM Representative Tomaszewski asked for more information about uncollected rental fees. Mr. Anderson responded that due to the decrease of rentals and armories, the department was able to reduce authority and lower rental fees. Many of the armories were either not in use or not being utilized, and those in remote locations had no armory attendants. ^DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT 2:17:05 PM CAROLINE HAMP, STAFF, REPRESENTATIVE CALVIN SCHRAGE, reviewed the finance subcommittee recommendations for the Department of Labor and Workforce Development (copy on file): The House Finance budget subcommittee for the Department of Labor and Workforce Development (DOLWD) recommends the following Fiscal Year 2027 budget: Fund Source: (dollars are in thousands) Unrestricted General Funds (UGF) $23,364.7 Designated General Funds (DGF) $28,683.5 Other Funds $17,094.3 Federal Funds $98,031.7 Total $167,174.2 Positions: Permanent Full-time 672 Permanent Part-time 32 Temporary 8 Total 712 Compared to the FY27 House Committee Substitute 1, the subcommittee recommendation represents a decrement of $534.0 (or -2.2%) in Unrestricted General Funds, a decrement of $5,724.3 (-16.6%) in Designated General Funds, a decrement of $1,453.8 (-7.8%) in Other Funds, and a decrement of $2,591.8 (-2.6%) in Federal Funds. Budget Actions: The House Finance budget subcommittee for the Department of Labor and Workforce Development held two informational meetings with the Department and one close-out meeting during the review of the FY2027 budget requests. The subcommittee adopted: • all Governor proposed budget changes with two fund source changes (detailed in Member Amendments below); • a technical transaction correction from the Legislative Finance Division; • a transfer of the State Training and Employment Program (STEP) from the numbers section to the language section; and • a deletion of two positions within the Commissioner's office. Member Amendments: The Chair set an amendment deadline, welcomed amendments from all members, and received an amendment to change the fund source for a Workers' Compensation increment. DOLWD requested a one-time increment of UGF to maintain Workers' Compensation operations. The Worker's Safety and Compensation Administration Account (WSCAA) is currently underfunded due to a decrease in revenue derived from employer-paid insurance premiums and lack of reverse sweep, leaving no carryforward funding. Due to a member amendment, the subcommittee voted to change the increase ($1,405.0) from UGF to Timber Sale Receipts. A member conceptual amendment was also adopted to fully fund ($478.9) the Office of Citizenship Assistance and its three positions through STEP funds instead of previously-used UGF. Attached Reports: The Finance Budget Subcommittee for the Department of Labor and Workforce Development (DOLWD) adopted the BA Report and corresponding Legislative Finance Division documents, which are attached. 2:20:34 PM Representative Hannan asked how money from a different department's receipts could be taken to fund workers' compensation, which was a legal obligation. She asked what would happen to timber receipts if there was no timber sale. Ms. Hamp responded that the timber sale receipt could be used for any public fund source. There was collaboration on the change with the Office of Management and Budget (OMB) and the Legislative Finance Division (LFD) to ensure that there were currently sufficient timber sale receipt funds to fund the item. Representative Hannan noted that she had previously been a member of the Department of Natural Resources (DNR) finance subcommittee, but she was not currently on the subcommittee. She understood that timber receipts were typically used to support operations within the Division of Forestry. She asked whether the change would require a reduction in the DNR budget for previously planned uses of timber receipts or whether the funds were considered excess and available for reallocation. Ms. Hamp responded that there were sufficient funds for the current fiscal year. She explained that adequate funding was available both within the existing DNR budget and through the one-time allocation, because the item was a one-time increment. Representative Hannan asked whether both the $84,000 in UGF and approximately $343,000 in interagency receipts associated with two positions in the commissioner's office were being removed. She asked if the positions were being removed also. Ms. Hamp confirmed that both the funding and the positions were proposed for deletion. Representative Hannan stated that she intended to pursue restoring at least one of the positions. She explained that one of the positions was a legislative liaison for the Department of Labor and Workforce Development and played an important role in assisting constituents, particularly with unemployment-related issues. She indicated that the department was willing to fund the position internally using interagency receipts, but removal of the position authority would prevent that option. She expressed her intent to work with the committee to restore the position while still allowing for the reduction in general fund support. 2:25:11 PM Representative Galvin asked for a brief explanation of the decision to change the fund source for the Office of Citizenship Assistance (OCA) from unrestricted general funds (UGF) to statutory designated program receipts. She asked whether the change would make funding for the program less stable. Ms. Hamp responded that the subcommittee had sought opportunities to reduce UGF spending and determined that a fund source change would allow the program to continue operating while achieving savings. She did not have a definitive answer regarding the long-term stability of the funding. Representative Galvin asked for clarification on whether the fund source change would require annual reconsideration to maintain funding for OCA. Ms. Hamp responded that the program would remain in the base budget even with the use of statutory designated program receipts and would not necessarily require reauthorization each year. ^DEPARTMENT OF NATURAL RESOURCES 2:27:13 PM Ms. Hamp reviewed the finance subcommittee recommendations for the Department of Natural Resources (copy on file): The House Finance budget subcommittee for the Department of Natural Resources recommends the following Fiscal Year 2027 budget: Subcommittee Recommendations (Numbers Section Only): Fund Source: (dollars are in thousands) Unrestricted General Funds (UGF) $23,364.7 Designated General Funds (DGF) $28,683.5 Other Funds $17,094.3 Federal Funds $98,031.7 Total $167,174.2 Positions: Permanent Full-time 672 Permanent Part-time 32 Temporary 8 Total 712 Compared to the FY27 House Committee Substitute #1, the subcommittee recommendations represent an decrease of $272.5 (-0.4%) in Unrestricted General Funds, an increase of $3,896.5 (7.3%) in Designated General Funds, $1,355.2 (2.5%) in Other Funds, and $7,609.9 (41.6%) in Federal Funds. Budget Action: The House Finance budget subcommittee for the Department of Natural Resources (DNR) held two informational meetings with the Department and one close-out meeting. The subcommittee adopted: • All of the Governor's proposed budget requests except changes to create the Department of Agriculture, which included denying structure changes and two increments totaling $301.1 of various fund sources (the subcommittee recommendation is to keep the Division of Agriculture housed within DNR); • A decrement of $641.1 UGF to delete four vacant forester positions located in Anchorage, Haines, and Ketchikan; • A $900.0 fund source change from UGF to Timber Sales Receipts to pay for forestry related positions, reversing action taken in FY25; • A deletion of the recently vacated Deputy Commissioner position; • A one-time increment of $1,956.6 in Vehicle Rental Tax to fund revenue-generating facilities and infrastructure projects within Parks Management and Access. Compared to the FY27 Governor Amend budget, the subcommittee recommendations represent a decrease of $1,960.5 (-2.6%) in UGF. Subcommittee Amendments: The Chair set an amendment deadline, welcomed amendments from all members, and received one amendments that ultimately was not offered during the close-out meeting. A conceptual amendment was offered but failed. Attached Reports: The House Finance budget subcommittee for the Department of Natural Resources (DNR) adopted the attached BA Report. Co-Chair Josephson asked whether the proposed use of the vehicle rental tax in the final bulleted item of the narrative would exceed the available revenue or whether sufficient funds existed. Ms. Hamp responded that the proposal would exceed the typically allocated amount and would result in over- appropriating the vehicle rental tax. Co-Chair Josephson asked whether expenditures would be limited to the available revenue or whether spending could continue. Ms. Hamp requested assistance from LFD for a more detailed explanation. 2:30:46 PM ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION, responded that the legislature typically appropriated vehicle rental tax revenue based on actual receipts from a prior completed fiscal year. He clarified that the proposal would exceed the amount of revenue collected in FY 25, which was the prior fiscal year. He explained that the vehicle rental tax functioned as a tracking code within the general fund rather than as a standalone fund with a retained balance. As a result, if appropriations exceeded the recorded revenue, general funds would be used to cover the additional spending. Co-Chair Josephson asked if he would effectively be able to tell his constituents in Anchorage that spending on parks management, access, and infrastructure had increased by $1.95 million. Mr. Painter responded that the situation was unusual because the vehicle rental tax was classified as a designated general fund rather than a standalone fund with its own balance. He explained that the revenue ultimately rolled up into the general fund. In past instances where small over-appropriations occurred, the excess had simply been covered by the general fund. He added that the state had not previously intentionally over-appropriated by a significant amount and that it was unclear how the governor or the Division of Finance would respond in such a case. Representative Galvin asked whether the vehicle rental tax had originally been intended, either in statute or intent language, to support tourism marketing efforts such as those carried out by the Alaska Travel Industry Association (ATIA). Mr. Painter responded that statute designated the entire amount of vehicle rental tax revenue for tourism marketing purposes. Representative Hannan asked for clarification on how much the fund was being over-appropriated. Mr. Painter explained that the over-appropriation was approximately equal to the proposed increment of about $1.9 million. He noted that the fund had already been slightly overspent by a small amount prior to the addition by around $50,000. 2:34:39 PM Representative Hannan asked for confirmation that the calculation accounted for all relevant appropriations drawing from the vehicle rental tax, including those within the Department of Transportation and Public Facilities (DOT) and the Department of Commerce, Community, and Economic Development (DCCED). Mr. Painter responded in the affirmative. Representative Bynum asked whether the budget currently funded tourism marketing. Mr. Painter responded in the negative. Representative Bynum expressed concern that the state maintained a revenue source designated for tourism marketing while not allocating those funds toward the intended purpose. He thought complications could be created in future budgeting decisions by requiring reliance on UGF instead of the intended revenue stream. Co-Chair Josephson asked Mr. Painter whether ATIA was sometimes funded in the capital budget rather than the operating budget. Mr. Painter responded that ATIA had been included in the capital budget more often than not, although it had occasionally appeared in the operating budget. He added that, in the current governor's proposal, it was included in neither. Representative Galvin relayed that she had been advised against shifting positions from designated general funds to UGF due to potential accounting issues or statutory concerns. She asked for clarification on how that guidance applied to the current discussion. Mr. Painter responded that the positions in question were tied directly to the collection of receipts, making the designated general fund an appropriate funding source. He explained that there was a prior policy decision that had shifted funding to UGF in order to free up timber sale receipts for capital projects. He noted that the governor currently proposed using timber receipts for capital purposes, and that the present change would effectively revert to using timber receipts for operating expenses, consistent with earlier practice prior to that shift. 2:38:07 PM Representative Bynum asked for clarification on item 12 related to fire suppression and land and water resources forestry management development. He noted that the item proposed deletion of four vacant forestry positions and asked whether the deletions were based solely on vacancy status or whether there had been discussion regarding the operational need for the positions. Ms. Hamp responded that the deletions were partially a cost-saving measure and partially due to the positions being vacant. She added that the budget included federal Good Neighbor Authority funding intended to support a forestry position in Ketchikan, which was expected to help offset staffing impacts. ^DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT 2:39:15 PM DAVID JIANG, STAFF, REPRESENTATIVE ALYSE GALVIN, reviewed the finance subcommittee recommendations for the Department of Education and Early Development (copy on file): The House Finance Budget Subcommittee for the Department of Education and Early Development (DEED) held a total of seven meetings and received eight presentations on department and division budgets, including the Governor proposed and amended budget actions. Based on that information and related discussions, the Subcommittee accepted all Governor operating budget actions and added seven items. The Subcommittee submits the following recommended FY 27 operating budget to the House Finance Committee. RECCOMENDATIONS: Fund Source: (dollars are in thousands) Unrestricted General Funds (UGF) $105,018.7 Designated General Funds (DGF) $38,364.6 Other Funds $38,416.3 Federal Funds $267,354.3 Total $449,153.9 Compared to the FY27 governor's amended budget proposal, subcommittee recommendations represent an increase of $4,900.1 (+4.9%) in UGF. Importantly, the amounts above are for the Department of Education & Early Development and do not include public education funds that go directly to districts based on formula funding, base student allocation (BSA) or Pupil Transportation, which accounts for $1,233,953.1 and $72,826.1 UGF respectively, since these are considered language items not in the purview of the subcommittee. Should these items be included, the increment of $4,900.1 UGF discussed would account for a 0.3 percent increase. Positions: Permanent Full-time 280 Permanent Part-time 10 Temporary 16 Total 306 [Due to length, please view the copy on file for the Budget Action section of the summary.] 2:49:22 PM Co-Chair Josephson commended Representative Galvin and her staff for presenting a strong and well-supported case for the requested increments. Representative Hannan directed attention to items 21 and 22 related to the Higher Education Investment Fund (HEIF). She asked would happen to those increments if the fund was not recapitalized. Mr. Jiang deferred the question to LFD. 2:50:11 PM CONNOR BELL, FISCAL ANALYST, LEGISLATIVE FINANCE DIVISION, responded that HEIF was subject to appropriation. He stated that sufficient funding existed for the current fiscal year to support the increments regardless of whether recapitalization occurred. He cautioned that without recapitalization, the fund would continue to be drawn down at an unsustainable rate relative to expected market returns, leading to a gradual depletion over time. ^JUDICIARY 2:51:07 PM KEENAN MILLER, STAFF, REPRESENTATIVE NELLIE JIMMIE, reviewed the finance subcommittee recommendations for the Judiciary (copy on file): The House Finance Budget Subcommittee for the Judiciary (Court System) held a total of 2 meetings and submits the following recommended operating budget for FY27 to the House Finance Committee: RECCOMENDATIONS: Fund Source: (dollars are in thousands) Unrestricted General Funds (UGF) $105,018.7 Designated General Funds (DGF) $159,591.6 Other Funds $0.0 Federal Funds $2,812.0 Total $1,805.3 Compared to the FY27 Governor's Amended budget, the Subcommittee recommendations appropriates $1,085.3 more UGF (0.7%). Positions: Permanent Full-time 755 Permanent Part-time 38 Temporary 6 Total 799 BUDGET ACTIONS The Governor's proposed budget was accepted with the following changes: - Add $600.3 UGF for inflationary increases to lease, utility, and service payments. - Add $115.5 GF/MH for salary and benefit increases of two paralegals for centralized competency calendar management (IncT; FY27-28) - Add $6.0 UGF to the Commission on Judicial Conduct for increasing annual travel expenses of quarterly in- person commission meetings. SUBCOMMITTEE AMENDMENTS The Chair received one amendment from subcommittee members in advance of the deadline. The following was adopted: - Add $363.5 UGF to address increased court visitor caseload and backlog. ATTACHED REPORTS The House Finance Budget Subcommittee for the Judiciary (Court System) adopted the attached Budget Action Report provided by the Legislative Finance Division. ^DEPARTMENT OF PUBLIC SAFETY 2:54:02 PM Mr. Miller reviewed the finance subcommittee recommendations for the Department of Public Safety (copy on file): The House Finance Budget Subcommittee for the Department of Public Safety held a total of 4 meetings and submits the following recommended operating budget for FY27 to the House Finance Committee: RECCOMENDATIONS: Fund Source: (dollars are in thousands) Unrestricted General Funds (UGF) $290,560.7 Designated General Funds (DGF) $9,984.2 Other Funds $16,604.4 Federal Funds $41,352.6 Total $358,501.9 Compared to the FY27 Governor's Amended budget, the Subcommittee recommendations appropriates $2,292.0 more UGF (0.8%). Positions: Permanent Full-time 1,009 Permanent Part-time 11 Temporary 38 Total 1,058 BUDGET ACTIONS The Governor's proposed budget was accepted with the following changes: - Add $1,200 UGF for inflationary increases for direct service provider grants for survivors of domestic violence and sexual assault. - Add $500.0 UGF to replace lost federal Victims of Crime Act funding and provide legal services to survivors of domestic violence and sexual assault. - Adds $592.0 UGF to replace reduced Restorative Justice Funds allocated to the Violent Crime Compensation Board and used to capitalize the Crime Victim Compensation Fund. SUBCOMMITTEE AMENDMENTS The Chair received 10 amendments from subcommittee members in advance of the deadline. None were adopted. ATTACHED REPORTS The House Finance Budget Subcommittee for the Department of Public Safety adopted the attached Budget Action Report provided by the Legislative Finance Division. ^DEPARTMENT OF FISH AND GAME 2:56:41 PM Mr. Miller reviewed the finance subcommittee recommendations for the Department of Fish and Game (copy on file): The House Finance Budget Subcommittee for the Department of Fish and Game held a total of 4 meetings and submits the following recommended operating budget for FY27 to the House Finance Committee: RECCOMENDATIONS: Fund Source: (dollars are in thousands) Unrestricted General Funds (UGF) $77,802.1 Designated General Funds (DGF) $12,875.8 Other Funds $92,639.4 Federal Funds $95,906.9 Total $279,224.2 Compared to the FY27 Governor's Amended budget, the Subcommittee recommendations spend equal UGF funds. It adds three temp positions. Positions: Permanent Full-time 868 Permanent Part-time 576 Temporary 4 Total 1,448 BUDGET ACTIONS The Governor's proposed budget was accepted with the following changes: - Add $400.0 UGF to the commercial Fisheries/Westward Region Fishery Management to supplant contributions made by the Bristol Bay Science and Research Institute to the Port Moller Test Fishery. The Port Moller Test Fishery is used to generate estimates of sockeye salmon stock and age composition and is deemed a core program by the Bristol Bay Fisheries Collaborative, of which the Department is a member. The subcommittee Chair recommends a technical correction to transfer this increment from Commercial Fisheries/Westward Region Fisheries Management to Commercial Fisheries/Central Region Fisheries Management in the full Finance Committee. The correction would change nothing about the intended use of this funding. - Replace $1,160.3 in CFEC receipt authority with UGF in the Commercial Fisheries/Statewide Fisheries Management allocation. This eliminates the Commercial Fisheries Entry Commission's (CFEC's) projected negative carryforward balance. - Add $532.9 in CFEC receipt authority to the CFEC Appropriation to fund three positions related to records reduction, Bristol Bay permitting, and IT modernization; restore the services budget to sustainable levels; and reclassify IT positions. - Add a $150.0 FY27-FY29 IncT to give the Commercial Fisheries Entry Commission the CFEC receipt authority needed to fund its IT modernization project. - Replace $682.8 CFEC receipt authority with UGF in the statewide fisheries management allocation to again eliminate CFEC receipt overdraw. - Replace $2,243.1 UGF with FED so the hatcheries can leverage in-kind contributions from construction costs for the use of Dingell-Johnson funds. SUBCOMMITTEE AMENDMENTS The Chair received no amendments from subcommittee members in advance of the deadline. ATTACHED REPORTS The House Finance Budget Subcommittee for the Department of Fish and Game adopted the attached Budget Action Report provided by the Legislative Finance Division. Co-Chair Josephson asked whether item 7 might be amended to move the item from the Westward Region to the Central Region. Mr. Miller replied that an amendment could be offered and explained that the original designation had been an error. He clarified that the mistake resulted from referencing the location where the study was conducted rather than the region in which the department actually administered the program. 3:01:12 PM Representative Hannan asked for more information about the Commercial Fisheries Entry Commission (CFEC) projected negative carryforward balance. She asked for confirmation that the anticipated negative balance applied to the current fiscal year. Mr. Miller responded that he would prefer to consult LFD for a precise answer. He understood that at the current rate of overdraw, the CFEC balance was expected to reach approximately negative $1.2 million in the following fiscal year. Representative Hannan asked how many staff CFEC currently had, especially highly paid positions such as commissioners and the executive director. She asked if there were any vacant positions. Mr. Miller responded that as of February of 2026, there were five vacant positions within CFEC. He relayed that the commission had already folded the positions into its organizational structure. Representative Hannan asked how the agency could be accruing a negative spend prediction despite having a high number of vacancies, given its relatively small total staff size. She did not understand how CFEC was spending a high amount of money despite having five vacancies. Mr. Miller responded that the deficit was driven by overall expenditures exceeding projected receipt revenue rather than staffing levels alone. He outlined that expected receipt revenue for FY 27 was approximately $6.5 million, while combined expenditures included about $4.023 million for CFEC operations, approximately $3.579 million for commercial fisheries expenditures, and about $300,000 was expected for the Fishermen's Fund. The combined expenditures resulted in a projected negative carryforward balance of roughly $1.16 million. Representative Hannan asked whether the subcommittee had considered eliminating any of the existing vacant positions within CFEC, separate from positions related to IT modernization. Mr. Miller responded in the negative. HB 263 was HEARD and HELD in committee for further consideration. HB 265 was HEARD and HELD in committee for further consideration. Co-Chair Josephson reviewed the agenda for the following day's meetings. ADJOURNMENT 3:06:47 PM The meeting was adjourned at 3:06 p.m.