Senate Finance, 5/16/26, 9am

ប្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រ ទ្ទ្ទ្ទ ទ្ទ្ទ្ទ្ទ បាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន�私はあなたを愛しています。私はあなたを愛しています。私はあなたを愛しています。私はあなたを愛しています。私はあなたを愛しています。 ប្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រុង្រ

Senate Finance Committee to order. Today's May 16th. We're in State Capitol Senate Finance Room.

Saturday afternoon. It is 16 minutes to 3. Present today: Chairman Olson, Chairman Steadman, Senator Keehl, Senator Merrick, Senator Kaufman, Senator Cronk, and myself, Senator Hoffman. We have 4 items on today's agenda: HB 280, HB 388, HB 239, HB 110.

HB 280 is a portion of taxable income. Are there questions from committee members on this piece of legislation?

Will of the committee, Senator Steadman?

Thank you, Mr. Chairman. I move the Senate Finance Committee substitute for House Bill 280, version T, from committee with attached fiscal note and individual recommendations. Is there objection? Seeing none, that bill moves on to the next committee referral. The second item is HB 388, bulk fuel loan cap.

Do members of the Finance Committee have any questions on this piece of legislation? Seeing none, will the committee— Senator Steadman. Thank you, Mr. Chairman. I move House Bill 388, version N, from committee with attached fiscal note and individual recommendations. Is there objection?

Objection. That bill moves on to the next committee of referral. That brings up HB 239, criminal neg— negligent homicide, failure to assist.

We have a CS for introduction. Senator Steadman. Thank you, Mr. Chairman. I move the Senate Finance Committee adopt committee substitute for House Bill 239 Finance Version W before the committee as our working document. I will object and ask Liz Harpole, staff to Senator Olson, to the committee to explain the CS to the Finance Committee.

Thank you. Good afternoon. Liz Harpold, staff to Senator Olson and the Senate Finance Committee. Before you, in version W of HB 239, we've made a few changes. Specifically, we've added a few programs and we've tweaked or amended some of the language that was already in there.

For the additions, we've added the Address Confidentiality Program within the Department of Administration. We've added a tribal liaison in the Department of Corrections. We've amended some of the language around the parole board, and I will go into a little more explanation on each of these changes here in a second, but just to give you the high level at least. And then we've added definitions for theft in the third degree. Some of the language that we amended has to do with medical release, the handling of CSAM or child sexual abuse material.

And then some technical fixes that were flagged for us from the Department of Law. So to go through kind of in order of the bill of where these changes occur, um, and looking at this explanation of changes in Section 20, this is where you'll find the new definitions, um, for theft in the third degree, specifically for authorized depository, mail, mail receptacle, and postage. In sections 25 and 28, this adds an exemption for the distribution of child sexual— or CSAM— or generated obscene CSAM for employees who work for, you know, certain kinds of tech companies that are employed to seek and destroy this kind of material. And so in the process of doing their job, they might have some distribution technically. And so this would exempt them from doing their job of seeking, destroying, and preventing the proliferation of generated obscene CSAM or CSAM materials.

In sections 68 through 71, it's a new section we're adding, some language about the Board of Parole. This incorporates portions of SB 62 version N. We are increasing the number of members from 7 to 5, and instituting a two-term limit. And in addition of those new members, we're specifically saying that you need to have one who is a licensed physician, psychologist, or psychiatrist, one member with a personal or professional experience in drug and alcohol addiction, and one member of a federally recognized tribe in the state. We also include a definition of what federally recognized tribe is. This doesn't change the existing stipulations of parole board members that there must be a member from each of the 3 judicial districts and one member with experience in the field of criminal justice.

In section 72, we add another consideration for the Board of Parole in making decisions. About discretionary parole to consider the age at time of offense when making their decision. In Section 73, we tightened up the eligibility for and revocation of medical release for service of sentencing by electronic monitoring. Sections 74 and 75 relate to the establishment of the address confidentiality program. This was laid out in Senate Bill 31, version N, with one change, making— to update the crime of disclosing information made confidential under this section about an individual enrolled in the program a Class A misdemeanor instead of Class B.

And what that Address Confidentiality Program does is create a program for survivors of sexual assault and domestic violence, peace officers and correctional officers, correctional officers and their families who, you know, you need an address to vote, drive, work, and that address can show up in a public record. And due to the nature of how some of these people interact with criminals, um, for their safety. This program will help establish a way for them to have a private address for mail forwarding. And then Section 77 is where we establish a tribal liaison within the Department of Corrections. This tribal liaison will be housed within the Commissioner's Office to facilitate internal communications and collaboration relating to cultural programs and processes and to interact between communities in the state and federally recognized tribes.

And additionally, we made some technical fixes in sections 12, 13, 26, and 65 that the Department of Law flagged. And I just have to say, this is a very collaborative process between members of this body and the Department of Law in coming up with this current CS. Additionally, I would like to note that given the scope of what this bill now contains, we ought to be referring to it as a public safety omnibus. Thank you. Thank you, Ms. Harpo.

Thank you for all of your hard work. We have several people that are available for questions. Casey Schroeder from the Department of Law. Captain Scott Bartlett, Alaska State Troopers. Sergeant Nathan Bucknell, Alaska State Troopers Technical Crimes Unit.

Director Lisa Perton, Perton Statewide Services. Director Diana Thornton from Administrative Services. Director Susie Frenzel, Victim Assistance and Forensic Science, and Chief David Carnaris, Alaska Criminal Labs. Do we have questions on the CS Center? Kronk.

Thank you, Mr. Chair. I do have a question on Section 72, and it is specifically says at— or age at the time of offense. Can somebody explain Is that exactly what that means?

Is there anyone online that can answer Senator Cronk's question? Repetis. Repetis.

Come back to order and ask Casey Schroeder from the Department of Law to come to the table.

Do you want the—.

Question from Senator Cronk, repeated, or—. Mr. Chairman, no, I have the question. Thank you. For the record, Casey Schroeder, Senior Assistant Attorney General for the Criminal Division, Department of Law. The phrasing age at the time— through the chair to Senator Cronk— the phrasing age at the time of the offense is drawn from case law.

There was a case that was fairly recently decided called Fletcher v. State that talked about when a person who is a juvenile is sentenced as an adult for a crime, what constitutes life without parole. And so there was extensive discussion in that case, and what the court determined was that that particular person had been sentenced to life without parole and that they needed to have their sentence adjusted. In so doing, the court said that the sentencing court who is issuing sentences from here on out for people who are juveniles and commit serious offenses and are tried as adults needs to consider the age at the time of the offense. And that phrasing draws back to case law which goes into more detail about the maturity of the person at the time, whether or not they were influenced by other outside factors, things like that. But the court has also said that the parole board future applications for discretionary parole, if the person was a juvenile and sentenced as an adult, needs to consider their age at the time of the offense when determining whether or not discretionary parole would be appropriate.

That's what that phrasing relates back to. Thank you, Ms. Schroeder. Senator Cronk. Thank you, Mr. Chair.

Thank you, Senator Cronk. Senator Kaufman. Thank you while you're here. I appreciate the opportunity. Could you just go over Section 73?

It's kind of interesting. In one case, It's tuning up in 72 the perpetrator, their age, but 73 is some of the things that were tightened up with respect to protecting kids from folks that get that medical release. Ms. Schroeder. Through the chair, Senator Kaufman, that is actually solely a DOC section and I don't have the knowledge base to answer that question. I apologize.

I just figured you know everything. Senator Kaufman? No, I'm good, thank you. Further questions on the CS from the Senate Finance members?

Seeing none, is there— I remove my objection to the adoption of the CS. Is there further objection to the adoption of the CS at this time? Seeing none, the CS is adopted, we will set this bill aside for further consideration. The last item on today's calendar for the Senate Finance Committee is HB 110, Social Work Interleague Compact. This is the first hearing on this piece of legislation.

However, we have a CS to— before we get the bill itself. Senator Steadman. Thank you, Mr. Chairman. I move that the Finance Committee adopt committee substitute for House Bill 110, version W, before the committee as our working document. And I will object to hear from Liz Harpo, staff to Senator Olson.

Thank you. For the record, Liz Harpo, staff to Senator Olson and the Senate Finance Committee. So what the CS does is pull a couple of items out. Specifically, in the CS, there is language related to background check requirements for various licenses. This specific language is also included in a bill that we have heard and moved from this committee, HB 173 version I.

And so that pulls a number of things out of the title of that— of this bill. Additionally, With the removal of things like occupational therapy, we removed the scope of practice definition since we were already shrinking that title related to removing that background license check section. Additionally, we deleted the establishment of the Rural Health Transformation Project Advisory Council. Thank you for that explanation. I will remove my objection to the adoption of the CSs.

Is there further Any objection to adopt the CS by the Finance Committee? Seeing that none, that CS is adopted. I invite Representative Gray to the table to introduce the bill to the committee.

I see his trusty staff coming forward. Mr. Johanson. Please identify yourself for the record and proceed to enlighten the committee. Thank you, Mr. Chairman. My name is Kyle Johansen, staff to the sponsor, Representative Andrew Gray, who is undoubtedly on the floor debating something.

Something. Yes, sir. The legislation started off as a social work compact. That was the intent behind the bill as introduced by Representative Gray. The, um, University of Alaska has predicted about a 15%, uh, increase in need for social workers across the state.

And Representative Gray thought that this, uh, compact would be a great way to help ameliorate that problem. Along the way in the, uh, committee process, it's picked up a few other compacts. We are not experts in that. But I can assure you that Representative Gray supports the version that was adopted, sir. Do we have— before we open up for questions of Mr. Johanson, we have available for questions from the Senate Finance Committee Courtney Enright, legislative liaison from the Department of Health, Ms. Robb, director of CDL— CBPL.

Brian Webb, paramedic EMT, and Angela Oler, director of respiratory care from the Central Peninsula Hospital. Members of the Senate Finance Committee, have any questions of the individuals or of the prime sponsor's staff?

Seeing none, we will set this bill aside for further consideration by the Senate Finance Committee. And that concludes this afternoon's meeting. Our next meeting is scheduled for Monday morning at 9:00 a.m.

Anything? Very nice.

Call the Senate Finance Committee back to order. We had scheduled HB 28 for their consideration at this time. There were some technical adjustments to that piece of legislation. So we will take an adieu and convene again at 3:30 to address HB 28, which is Teacher State Employee and Student Loan Program. We are in recess until 3:30.

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We reconvene the Senate Finance Committee back to order. There is one final piece of legislation that we have before the committee, that being HB 28, Teacher State Employee Student Loan Program. This is the first hearing on this bill.

We have a CS to introduce. Senator Steadman. Thank you, Mr. Chairman. I move that the Finance Committee adopt the committee substitute for House Bill 28, version W, before the committee as our working document. And I will object for explanation of the CS and invite Senator Tobin to the table and her trustee aide, Mr. Mason.

Thank you, Mr. Chairman. For the record, my name is Lukey Gail Tobin, senator for District I. My name is Mike Mason. I am staff to Senator Tobin. Well, thank you, committee.

The version of the CS for House Bill 28 before you should be version W, and it does 5 things. The first thing is what the underlying bill continues to authorize, which is a 3-year pilot teacher loan program that will be specifically for special education educators and STEM teachers. Those are the most difficult to fill positions. The funding source for those particular programs comes from the Higher Education Investment Fund. The second thing that the CS for House Bill 28 does is align district correspondence material, curricula, equipment, and textbook retention policies with the same policies that are held by the in-person brick-and-mortar schools.

So you cannot have two disparate policies. They must be the same policy. The third, and this is one that I think is going to be a significant game changer for our school districts across Alaska, is the bill establishes a state energy grant program for school districts. Obviously subject to appropriation. The formula takes a 3-year average of brick-and-mortar school energy expenditures and then provides 100% reimbursement for those expenditures.

Importantly, it is, it is important to note that currently districts are using their base student allocation funds to meet their energy needs. We know some districts' energy needs cost over 60% of the resources they receive in basic school need, and this will help alleviate those pressures and hopefully get those dollars back into the classroom. That program will begin in 2028. The fourth thing that this bill does is allow regional resource centers to rehire retired teachers. And then the last thing that this bill does is it includes a provision of policy that was a part of Senate Bill 278, which one, aligns the school consolidation time period with Hold Harmless Currently, school consolidation is 7 years.

That means before a district can reopen a school building, they must keep it closed for 7 years. They only receive a step down in funding for 4 years. So this aligns those two policies, as we have heard from many districts, that their concerns about potential new investment and Alaska, an AK LNG grant program might bring additional people into the state and they may need to reopen school facilities. So we want to ensure that that possibility exists. And then within that particular section of the bill, we also put a limit on the growth a school district required local contribution from municipality or borough taxing authority can grow year after year at being 5%.

So right now, as a required local contribution is set at $2.65 mils, and we have heard from many districts that over the last 3 years they've had significant growth in their property values. An example we often share is the Kenai Peninsula had over 34% growth over the last 3 years. And that means that when you look at the, the amount that a local community is contributing to their school districts and the required local contribution, it is quickly assuming a significant portion of what used to be state funds. This cap at 5% will hopefully allow for a more smoothing of that growth and allow districts an opportunity to better account for that change in their contributions to their education systems. I do want to note that the Task Force on Education Funding is looking at this issue.

We know that there is some concerns about our school funding formula along with required local contribution, and we'll continue to evaluate this as we work on an adequacy study to figure out the best process of steps forward. So, Mr. Chairman, those are the pieces that are included in the CS for House Bill 28, and we're happy to answer any questions. Yes. Do members of the Senate Finance Committee have questions of the prime sponsor, Senator Kaufman? Thank you to the bill sponsors.

So with this energy reimbursement program, what incentives are there for efficiency if energy costs will be basically paid for? There doesn't seem to be any connection to using energy cost of it if the bill is being paid by somebody else. It makes me think of my dad yelling at me to close the door, we air conditioning the whole neighborhood. Any thoughts on that? Once again, Lukey Tobin for the record through the chair, Senator Kaufman.

That is a great question. There are a few dynamics to school energy expenditures. Currently there are no new school facilities being built, so the energy costs are currently being incurred based on windows that are only one pane or maybe two panes or not having efficient insulation. There may be some issues with some of the old boilers and some of those dynamics. One of the most significant things we can do to help reduce costs for our districts is to replace those outdated materials and systems and provide those funds toward major maintenance.

This committee has focused on major maintenance being one of the prime, prime focuses of our capital expenditures for this year. And my hope is that over the coming years we'll be able to focus those dollars into energy efficiency and into, into helping our districts actually reduce overall costs. It is really important to note that if you look, I believe, on page, uh, on page 3, section 4, starting line 29, there is a report and an audit as well that will come to this committee and to the legislature on energy expenditures and will provide us additional information about how we can assist districts as well, reducing those energy costs and expenditures and keeping more efficiency built into the system. Senator Kaufman, I appreciate all those things. I'm familiar with the work we did here on the deferred maintenance list.

I think the report's good, but it It sure would be nice if this bill were to pass, if it had something that put a little bit stronger guidelines on energy usage. And I don't want anybody to be cold or uncomfortable, but it just seems like it takes away some of that local, you know, incentive to do that. Thank you, Senator Kaufman. Further questions on the CS?

Senator Kaufman. On a different line of questioning, I'm curious about the change in the time period that you can't reopen a school. I'd just like to hear something about the logic on those changes, why it is the way it is. What were the drivers for that decision? Senator Tobin.

Luki Tobin, for the record, Senator for District I. Through the Chair, Senator Kaufman, that is a great question. Previously, when school consolidation statutes were put in place, the intent was to ensure that school districts did not close or consolidate their schools for cost savings and immediately the following year reopen them and were able to kind of capitalize on the hold harmless provisions and the step down. We really wanted to incentivize good decision making, good deliberation about school closures. I think over the last few years we all have lived in districts that there has been ample school closures.

And there's been a lot of consequences to the locally elected officials who've made those decisions. Many of those locally elected officials, uh, I don't think would close a school at this point in time simply for cost savings only to reopen it the following year. So in consideration of aligning these two policies, we looked toward again the Kenai Peninsula, where their borough assembly passed a resolution asking for an alignment between the hold harmless and the school consolidation. Practices because they are very concerned that while they are closing 3 schools this year, they may have a need to reopen at least one of those schools if some of the things that this body is currently working on were to come to pass regarding the AK LNG line and the potential increase in students to their district. They don't want to have overcrowding.

So in looking at those 2 provisions, we realized that that made a lot of sense and determined that was a good step to take. Senator Kaufman. Thank you. On that, I have another question. Please proceed.

Going back to the energy money, so that's essentially— it's creating a new funding channel or an alternative funding channel for energy, which is displacing some BSA expense. So have you worked this out into a BSA equivalent?

Once again, Luki Tobin for Senate Strickai. Through the chair, Senator Kaufman, you might have to help tease out that question a bit as I'm not sure what you're asking. The amount of money that will be appropriated, is it equal to a certain amount of a BSA equivalency? Is that— Yeah, exactly. So in terms of money going to schools, it represents a certain equivalency of BSA that would have otherwise been spent for energy.

And I'm just wondering if we're— we looked at it in that equivalency. Once again, Luki Tobin for the record, Senator for District I, through the chair, Senator Kaufman. I am going to bring your attention to Section 2 of the legislation. It's on page 3. This is where it sometimes gets a little bit challenging when we do BSA equivalents.

BSA is a set amount of dollars that then goes through a formula based on certain student characteristics. An average student might in Anchorage have an equivalency of the total basic need be about $13,000, while a student who resides in a rural area of Alaska might have an equivalency of about $20,000 because of district cost factor differentials, geographic differences, and some other factorials that might include intensive needs. So sometimes it's challenging to say a BSA equivalent because we, we have different student characteristics. The second part of my answer to your question is that that is the same issue at hand when you talk about district energy costs. A district, let's say an Anchorage school district, is going to have a different cost to their energy than Kuskokwim School District, which has to purchase their fuel through bulk fuel costs and then ship all their fuel upriver to their school districts.

So it's challenging to say that this equates to a certain amount of money because it's different across the state. There's geographic differences across the state. So instead, if you're looking on page 3 again, lines 12, 13, and 14, what we direct department to do is calculate a district's 3-year energy cost average so that we can identify what their actual expenditures are for heating fuel and electricity, and then we provide, uh, the average amount to the school district within that particular year. Uh, what we anticipate for the first year, 2028, is it's about $88 million. That's what we calculated for the past 3-year average, and at approximately $88 million, you're looking at about $138 within a BSA equivalency.

Senator Kaufman. Thank you. So what you're saying is kind of it's the same but it's different because there's different multipliers. And the BSA also has a district cost factor multiplier. So it's out, not included.

It doesn't jump back in and run through that because that's already baked in. So there is not a double dipping of geographic or logistic driven cost. Once again for the record, Lukey Tobin, Senator for District I, to the Chair, Senator Kaufman, correct. Further questions? Seeing none, I will remove my objection to the adoption of the CS.

Is there further concerns or issues with the CS? Seeing none, that CS is adopted. We'll set this bill aside for further consideration. Our next meeting will be on Monday at 9:00 AM. We are adjourned.