House Finance, 4/22/26, 1:30pm

Good afternoon. I call this meeting of the House Finance Committee to order. Let the record reflect that it is 1:37 p.m. on Wednesday, April 22nd, 2026. Present today we have Representative Bynum, Representative Moore, Representative Hannan, Representative Galvin, myself, Co-Chair Schrag, Co-Chair Josephson, and others will be joining us here shortly. As a reminder, if members could please mute their cell phones before we begin, I'd appreciate it.

Also here with our committee helping us with our work today is committee assistant Helen Phillips, Paige Tallulah Lestufka, Secretary Bree Wiley, and Secretary Leah Fraser. And last but not least, our LIO moderator, Emily Mesh. Thank you for your help with our work. Today we will hear a presentation from the Office of Management and Budget and the Department of Transportation and Public Facilities for an overview of the state's— state of Alaska's deferred maintenance backlog. And the processes, and then move to Senate Bill 41, mental health education.

And we've been joined by Representative Allard. We have with us today the Office of Management and Budget Director Lacey Sanders, and with the Department of Transportation and Public Facilities Division of Facilities Services, Director Daniel Gibson and Project Delivery Team Lead Christopher Hodgin. And we've been joined by Representative Stamp. Welcome. Director Sanders, Director Gibson, and Mr. Hodgin, if you guys could please come forward to the testifier's dais.

When you are ready, put yourself on the record and begin with your presentation. For members' awareness, we have about 13 slides plus an appendix, so we should have a little bit of time for questions should members desire. With that, it is all yours. Please proceed. Good afternoon, everyone.

For the record, again, my name is Lacey Sanders. I am the Director for the Office of Management and Budget. And today, I will let Danny and Christopher introduce themselves before we get started. For the record, Daniel Gibson, Director of Facility Services, Department of Transportation and Public Facilities. Good afternoon, Mr. Chairman, members of the co-chair, members of the committee.

My name is Christopher Hodgin. I serve our statewide public facilities team and our Division of Facility Services. Wonderful. Thank you for being with us. And also with us, we have been joined by Representative Tomaszewski and co-chair Foster.

Back over to you guys. Great, thank you. So again, for the record, this is Lacey Sanders. We also have Director Don Pannon from the department in the room and Jenny Logandino, Office of Management and Budget staff, to assist if there are questions or follow-up. So today for the committee, we are going to walk through what we consider the deferred maintenance overview for the state agencies.

So I do want to clarify that this presentation is focused on those state agencies such as the department agencies that we normally speak to— Department of Transportation, Fish and Game, etc.— as well as judiciary and the court system, or, and the University of Alaska. This presentation today does not include deferred maintenance that's associated with school districts, so the school major maintenance lists or the school construction list. It also doesn't cover the programs such as the Harbor Grant Fund. That is a separate program that's not covered in the state's deferred maintenance. And we're right off the bat, we've got a question from Representative Bynum.

Representative Bynum. Yes, thank you, Co-Chair Schrag. Thank you, Director Sanders, for being here. Just for the purposes of our conversation today, as we go through this slide deck and look at all of the facilities and the dollar amounts associated with deferred maintenance, will you define what we mean by deferred maintenance specifically in this context? Yes, sir.

That's through the chair, Representative Bynum. That's part of my notes today. We'll talk through that. Yep. Okay.

So as noted on this slide, we have provided what the state's portfolio looks like when we're talking about deferred maintenance and the number of properties that we are speaking to. The property types that we're talking about vary depending on the entity. For example, the University of Alaska is managing classroom-type facilities or laboratory and research facilities. While Department of Corrections and the Department of Family and Community Services are managing 24-hour institutions. Each of our agencies brings its own unique circumstances, and, and so through a several-year process working with the Office of Management and Budget and the Department of Transportation, we have set up something called the Facilities Council that works with state agencies to prioritize and rank the deferred maintenance of each state agency.

So we'll be walking through that today and providing some examples of what that looks like. For the purposes of deferred maintenance, when we speak with agencies, deferred maintenance is, to Representative Bynum's question, is the maintenance or repair of projects that have been delayed or postponed postponed due to lack of funds within the entity's normal operating budget cycle. Deferred maintenance projects are mostly items that entities cannot address through preventative maintenance and generally are greater than $25,000. The scope that we have provided to state agencies when looking at what will be considered as part of the deferred, deferred maintenance backlog does exclude things like runways. And, uh, harbor, uh, improvements for the Department of Transportation.

Um, there are more items such as windows replacements, HVAC systems, uh, we've had fire, um, and security system, uh, upgrades that are needed within facilities to be in compliance. Um, so it, it is a broad array, um, but we generally limit it to, uh, projects that will cost more than $25,000.

With that, I'll proceed to the next slide. Please continue. Yes, please continue. All right. So slide number 3 and slide number 4 go hand in hand.

This is providing just some broad-level information by agency on the backlog for each area. The first slide on slide 3 is the state agencies, including the university. This is a total of, as you can see, $766 million on our most recent backlog list. And if you move to slide number 3— or excuse me, 4, you will see where we provide the total including the universities, which is about $1.54 billion, bringing the total backlog up to $2.3 billion.

The university has a Board of Regents policy. It's P05.12.020D, that deferred maintenance and renewal, or DM and renewal and replacement, means the deficiencies from cumulative effect of major repair, renewal, and replacement, and renovations of projects that have not been carried out. Special consideration should be given to the identification and completion of projects that will result in further deterioration of a facility if not completed. Deferred maintenance and renewal excludes new construction unless specifically authorized. I wanna note this just in the sense that while we count the University as part of the state agency's backlog, the University has a very distinct process that they go through in calculating what their deferred maintenance what their deferred maintenance backlog is and what buildings and how those buildings are depreciated and accounted for.

If for new construction, I would— I'm going to have to defer any questions today pertaining to the university back to the university. I'm not in any way an expert to be able to speak to their deferred maintenance backlog.

And Representative Hannon has a question. Representative Hannon, thank you, co-chair Schrag. On the first— the second page, you say 17 state agencies including courts, legislature, and the university. But I don't see the legislature included in any of the backlog. And is that because— so just tell me how we are accounted for in that.

Through the chair, Representative Hannan, if I said the legislature, that was a slip. It only includes courts and the university. The legislature handles their deferred maintenance projects in their own—. Yeah, it's included on your slide. So we'll have your—.

In the—. They provide us that the information, so we just included it as part of the portfolio. Okay, sorry about that. Okay, just for the record, Ledge Finance Building needs a new roof, so our budget plan, but We may not have enough money to do it. And you might remember it.

Probably had the same roof when you worked there. Thank you, Representative Hannon. Representative Bynum. Thank you, Co-Chair Schrag, through the Chair, Director Sanders. I know that you said that you guys aren't going to be prepared to talk about the university system today.

Look forward to having that conversation in the future. But it would be—. It is important to note that when we look at slide 2, that the university comprises of 20% of the buildings in our inventory. They comprise of 40%— 39% of the square footage and when we go to slide 4, 67% of all the deferred maintenance. So when I look at that compared to the rest of our facilities, it demonstrates that the university has in the terms of deferred maintenance a real problem.

And I know that when we went through the operating budget process, we talked a lot about how we define those things. So I think passing along to them that identifying how that we've gotten to this problem and what their solutions are going to be other than just the UGF ask is going to be an important part of trying to get this fixed. And again, I appreciate you pointing out that they will be available in the future to try to talk to us about it. Just the numbers are pretty staggering when we compare it to all of our other facilities. Through the chair, Representative Bynum.

Yes, the university's numbers are staggering. In the conversations that I've had with President Pitney, they have identified, and I'm sure the committee members have heard this number, a $60 million need on an annual basis, which is far beyond the scope of available funds that we have had to put towards deferred maintenance statewide. I know also that the University has had a lot of conversations about divesting facilities and no longer having those costs associated with them. But again, I'm happy to pass that message on to President Pitney and make them available to answer questions for the committee on their backlog. Thank you.

OK, and just for the record, really quick, I'm not sure that I ever acknowledged that Representative Allard joined us as well as Representative Jimmy. Thank you for being here. Director Sanders, please continue. Great, thank you. So I'm going to move on along to slide 5 and speak just for a minute about a bit of historical context associated with the statewide deferred maintenance appropriations.

So, uh, In 2020, the legislature passed a bill related to what we refer to as the capital income fund. That capital income fund has what we were— revenue stream diverted to it by the legislature as a designated fund source from the Amaretta Hess settlement. That piece of legislation designated the money that flows from that Amaretta Hess settlement into the Alaska Capital Income Fund, which provides for deferred maintenance in the state, deferred maintenance needs. So each year the legislature appropriates those funds into the Alaska Capital Income Fund, and for the last several years has appropriated that money to the Office of Management and Budget to allocate to state agencies. Um, as I noted earlier, the Office of Management and Budget and the Department of Transportation and Public Facilities worked closely with the— what we refer to as the Facilities Council— to establish a process that every agency is using for consistency in ranking and evaluating the priority needs in the state.

As we've noted on the previous slide, there is not enough funding to address all of the needs, And so we use this process that Director Gibson and Christopher Hodgins are going to speak to in a little bit to outline and prioritize and rank the projects that are brought forward to the Office of Management and Budget for the allocation of funding on an annual basis. The slide before the committee, number 5, outlines by agency over the last several years how much each agency has received for projects within their agency.

I will note there are years that the University does get a portion of this deferred maintenance funding as well as the court system, but often the court system and the University also get direct appropriations through the capital budget to meet their needs. So it's a balancing process. We work very well with the University and the court system to understand what their facility— deferred maintenance needs are and incorporate that into the process.

There— I did want to make one additional note for fiscal year 2026. The Office of Management and Budget has worked very closely with the Department of Administration's Division of Finance to get a clear understanding of what funding has been deposited and what is available what is available after the appropriations that have been made over the last many years. We ran into an issue where this funding had been entirely obligated and did not want to put ourselves in a position of over-obligating. So we have held off this year on significant allocations of funding to departments and are waiting for the August distribution of the Amareta Hess money into that account. And then we'll start that process again for using the 2026 list.

So that's why there's no funding showing on here. Director Sanders, does this list include— is this— am I looking at just capital income fund, or is this a combination of capital income fund and UGF direct appropriations? What dollars are we talking about on this slide? Thank you for that clarification, Chair Sharagi. This slide is only referring to the Alaska capital income fund availability for deferred maintenance.

Costs outside direct appropriations of general funds would be accounted for elsewhere. Okay, and in your remarks, you talked about both the court system and the university system receiving direct UGF appropriations. Is that true for state deferred maintenance as well from time to time?

Through the chair, Representative— or to the chair, Representative Sharagi, I am trying to recall the last time we had direct general funds. I don't recall in the last 5 years that there's been direct general funds. It has been the Alaska Capital Income Fund as the source to, to, to provide funding for this. And then my last technical question before we go to Rep. Galvin, is there a reason fiscal year '26 isn't shown here? I know we're in fiscal year '26, but what would I— why is it not included and what would I see if it was included?

Representative or Chair Sharagi, the reason for that is Um, the Office of Management and Budget and the Division of Finance in the Department of Administration work together to reconcile the fund balance, the Alaska Capital Income Fund. Um, those deposits come from the Alaska Permanent Fund Corporation into the fund, and over the years, the appropriations that were made by the legislature exceeded the amount of revenue that had been deposited into the fund. So the Office of Management and Budget, myself paused on any new appropriations for fiscal year 2026 so that we didn't overappropriate the fund. So, uh, to clarify, so you have not made appropriations out of the capital income fund for fiscal year '26?

There, just a few days ago, uh, Chair Schrag, I made an appropriation for, I think, about $500,000 from a balance, um, of residual funds that had been returned to the fund, but not anything to the level of the $20 million that we've seen historically. Okay. I've got Rep. Galvin, Rep. Josephson, and Representative Bynum in the queue. Rep. Galvin. Thank you.

Through the chair, I think that you've mentioned that there's some reconciliation to be done yet, and it's related to getting a deposit from the HESS and from also from the permanent fund. Can you give us a sense of if you expect it to be relatively close to the same numbers? I'm looking at more or less around $30 million on average. Through the chair, Representative Galvin, for fiscal year 2026, there will be not— there will not be a number like that, like what we have seen in the previous years. The appropriations made exceeded the amount of revenue that had been transferred in.

This transfer comes to the fund in late August. So the deposit that will be made in this coming August will be used for fiscal year 2027. So we are skipping a year to ensure that we are not overappropriating a fund. Follow-up? Yes, thank you.

I wondered if you could give us an accounting of that. Of the last year or two so that we can see and have a sense. It sounds like you are working on that right now. I would appreciate seeing— I'm trying to understand how it got overspent too. I assume it is like a checkbook where you kind of know how much is in there, but it would be helpful to see that accounting if possible.

Thank you. Through the chair or Representative Galvin, we can provide a summary of the deposits and then the outflows. Thank you. Perfect. And I know you know this, Director Sanders, but route that through the co-chairs and we'll make sure that everyone on the committee receives that.

Uh, Co-Chair Josephson. Thank you, uh, Co-Chair Sharkey. Uh, Miss Director Sanders, I, I'm still a little confused on this FY26 phenomenon. Um, so in the final analysis, in the waning days of the previous session, the legislature overappropriated the fund. The fund comes from the permanent fund in some formula in combination with the Amaretto Hess settlement.

I know about the Amaretto Hess settlement. And rather than—. Rather than spending any portion of it, if it was funded 90%, you couldn't spend the 90%. So basically, other than this $500,000 you've mentioned, because of a legislative— we will call it an error— there is no deferred maintenance that was funded for statewide items in the current fiscal year? Because that is what I take from what you said.

Director Sanders. Through the chair, co-chair Josephson, let me back up a little bit and see if I can provide some context. Each year the legislature passes an appropriation bill that estimates how much money is going to come from the Amoretta Hess.

In prior years. That number was used to allocate to projects, but when the revenue was actually deposited into the fund, it may have been less than what was estimated into the bill. So in an effort— right now the fund is at zero, or about $500,000, and it's So in order to not overappropriate in 2026, we decided to pause on any new capital projects. There are many appropriations— excuse me, many deferred maintenance projects that are ongoing currently and are underway. So it's an accounting exercise in making sure that what was deposited into the fund equals what was appropriated out of the fund towards all of the projects.

I wouldn't say that anybody did anything incorrect other than using an estimate to award projects and not using what actually is deposited into the fund to make those projects. Does that help, sir? Yes. Paulo, can there be— and if this happens, it would have to happen mighty fast— but if there was— if the estimate was $30 million and instead $25 million arrived, can there be $55 million in FY27? If the average is $30 million, say.

I mean, I'm just wondering whether If you haven't spent resources that must have come to the capital income fund, is there an opportunity to spend more in FY27 because we did so little in FY26? Director Sanders, through the chair, Representative Joe Sand, that would require general funds or another funding source. The Amoretta Hess amount is a limited amount that comes on an annual basis.

And the appropriations are effective on— appropriations in a capital bill are effective on July 1st of a year. The deposit into the Amoretta Hess account doesn't happen until the following year in August. So nothing is available to spend until that deposit is made this coming August.

So that is why no money has been utilized this year from a deposit that hasn't been made yet. Okay, thank you. Director Sanders, I'm going to jump the queue for just a brief moment before going to Rep. Meinem. Can you remind me historically, does the legislature dictate out specific projects to be funded through the capital income fund, or do— does the legislature typically provide quite a bit of discretion to OMB on how to use that capital income fund to address state deferred maintenance needs? Chair Sharagi, the legislature appropriates the amount from the Alaska Capital Income Fund.

The administration uses the Facilities Council ranking to, uh, to move forward with which projects are going to move forward on the list, and that was provided in that manner to provide flexibility. Um, the prioritized ranking list is a point in time, and there are many state agencies that have emergencies that come up after the fact that aren't accounted for on the deferred maintenance list. So this gives us the flexibility to move to another project if the department has an emergency that comes up. But ultimately, or more simply, you're provided authority to spend from the capital income fund, and then you use your internal ranking process and sometimes make exceptions if there's an emergency that pops up to to figure out how to prioritize the use of those funds. Is that accurate?

Chair Schrag, yes, that's correct. Thank you. Representative Bynum. Thank you, Co-Chair Schrag, through the Chair, Director Sanders. If you'd mentioned it, I apologize, I didn't write it down.

The balance of the state v. Amerita has award. What is the balance of that? Director Sanders. Through the Chair, Representative Bynum. So It's— there is a settlement subaccount within the permanent fund, and each year it spins off earnings.

That amount is dependent on the market, and so it has varied year to year. It's generally about $20 to $25 million. Follow-up? Yep, follow-up, Rep. Bynum. So the $20 to $25 million, that's the earnings that we get from it.

What is the— what is basically, if you want to call it the corpus of that amount. The corpus—.

Through the chair, Representative Bynum, $425 million. Thank you.

Additional questions from committee members? Not seeing any at this point. Please proceed.

Okay. So moving on to slide number 6, we have allocation process that we just wanted to walk through the committee. So again, um, at the start of the process, OMB facilitates collecting the deferred maintenance lists from all of the agencies. From there, the State Facility Council, which also has one representative from each of the executive branch agencies, participates on that, and they review and prioritize their deferred maintenance projects, starting with their agency. So each agency works through their department's list and prioritizes and ranks it using a matrix that we are going to talk about here in a moment, and then presents that to the Facilities Council.

Once that Facilities Council process is complete, we— the top projects projects from each agency, and I'm forgetting how many from each agency. Is it 10? 10. The top 10 projects from each agency are put into a single list. Once we have an appropriation and actually have the revenue for that appropriation, we will go through and allocate funding to the amount that is available.

The university and the court system provide their list to OMB at the end of this, and they are combined in together. And again, There are considerations made for whether or not the university received a direct appropriation for projects, um, or has other funding needs outside of that, um, that need to be considered. Um, oftentimes the university and the court system have come to the Office of Management and Budget with emergency needs, just like other state agencies. Um, and so we account for those, uh, in that process. At this point, I'm gonna turn it over to the DOT folks.

If that's okay. Thank you, Director Sanders. For the record, Christopher Hodgin, Department of Transportation and Public Facilities. So I hope to step us through concisely the rubric and the process of the prioritization of, of projects. So essentially, to create a rankable list, we create a project index value for each of the projects.

It incorporates 3 different factors: a mission alignment index, a system factor, and a need, so that they can be, uh, multiplied together and create that rankable is for us. So stepping through the next slide, the Mission Alignment Index essentially identifies the relative importance of a facility for that particular department. So the most important facilities identify with that department's reason to exist. So amongst different departments, you might have various facilities. So some departments have dozens or hundreds of facilities, but amongst that, it is discerning which ones are most most important for them.

So you take into account certain things to think about when you think about high Mission Alignment Index facilities. So they can be how capable that facility is to deliver services, how utilized it is, proximity of the building, available of other facility options of— for that building. So again, this is determined by the agency, it is periodically revisited, and the most important facilities in a department align with that department's reason for existing. So I'm going to pause you for just a moment. Rep. Tomaszewski.

Thank you, Co-Chair Chiraghi. Do you take into consideration the energy needs of a particular building when developing this list, or the energy consumption, I should say? Mr. Honjan. Through the chair, thank you for the question, Representative Tomaszewski. The energy needs is not explicitly, like, identified in the Mission Alignment Index, but it is, like, implicit in a department's evaluation of a particular facility.

So when a department thinks about how capable is that particular facility able to meet its mission, it has to take into consideration its energy needs. Its energy consumption, its energy needs, like how well is that building performing. Thank you. Thank you. And Mr. Hodgin, when you are looking to the departments to provide you some of this mission alignment, these values, is it an engineer, is it the director, who within these departments are providing you that data, out of curiosity?

Thank you, Coach Arshraghi. We ask the Facilities Council representatives who are representatives from each executive branch agency and have knowledge of facilities to help develop that particular mission alignment index with their departments. And so what we observe and what we see and what we ask the departments to do is often they might come back and say all of these particular facilities are super important and they have high scores. So we asked them, can you please take a look again and revisit, because even if there are multiple facilities, please try to discern which ones are most important for the particular department. So it is— we asked those facility council members to do that for us.

Thank you, Mr. Hodgson. Please continue.

So this is— this scale just gives us a scale-like example of the different mission alignment indexes that are possible. Of course, when we're actually doing the evaluations, it is typically the most important buildings that we do the evaluation exercise. But if we take our Department of Transportation and Public Facilities, for example, we might have an office building and we might have a snow— a snow removal building. And the snow removal building is the one that most identifies with our Department of Transportation. Transportation, Public Facilities, reason for existing, and the office building may not be as high as far as Emission Alignment Index.

So it just gives you an example of the thought process that goes into that. The next two factors that are considered are the facility system factors and the need or urgency factor. And the facility systems factors is just that, taking into consideration the different systems of the building from building envelope, from grounds to mechanical and electrical to shell to windows to life, health, safety, and structure, going from that range of a low system factor to a high system factor. Like, when we take a look at the system factors, these systems may have— some systems have a bigger impact on the operations of the entire facility. So those are some of the considerations that are taken into account.

And then any of these systems may turn into a life, health, safety consideration, and when that happens, then that escalates and becomes higher on the system factor. The need—. The need scale is just that. So the 5 being a critical need which needs immediate replacement, a 4 is something that's identified as important but not yet critical, and 3 is something that is necessary.

So In general, the Facilities Council worked through a multi-month process, about 4 months in calendar year 2025, and they evaluated approximately 80 projects, and about $80 million was the approximate value of those projects. So this is just the excerpt from the example that was crafted. Representative Gell. Thank you, Co-Chair Schraggi, through the Chair. I think this is probably the best place to place this question, and it is related to whether OMB has done any cost projections on how much in cost the deferred maintenance backlog of each department will grow if these items are not addressed.

For example, if DEED's deferred maintenance backlog and it grew by 36.9% or just under $10 million in costs. What can we expect for next year if these costs are not addressed? I assume that was part of some of your thinking when you decide whether it is critical or not, but maybe not. I just thought I would ask that. Is that a question for Director Sanders?

I think—. Well, whomever has the expertise. Expertise, I think the person who designed this heuristic may be the one who would appreciate what I'm talking about, right? It's understanding the— that changes price or because it's not taken care of and then making some decisions partly based on that as well.

Mr. Hodgin. Thank you to the co-chair, Representative Galvin. Thank you for the question. I'm thinking through this question at the same time as we go. I'll jump in if that's okay, Chair.

Director Sanders, please. Representative Galvin, from just a technical perspective, no, OMB has not come in and done a forecast or a projection on what not funding the entire list or any portion of the list would cost. There are some factors that would be very difficult to model out, such as what we have seen in inflationary costs associated with projects. So even projects that we currently have underway, we often have state agencies coming back and asking, we, you know, our contract has increased, or our You know, can we repurpose this money that we are not using for another project towards this project because our costs have now escalated because we found rot? So there are a lot of unanticipated needs.

You know, I have said this in the committee multiple times. There is not enough funding to do everything. So the approach has been to utilize the capital income fund to the extent that we can to meet the most prioritized needs. We do ask state agencies to go back and review their list on it, you know, multiple times to provide updates. And to co-chair— or excuse me, Chair Schrag's earlier question about who is doing these evaluations, that's also why we have the Department of Transportation leading this in their efforts with the expertise.

They're going back and looking at the list and saying, is that reasonable? Is that realistic?

And, but to your point, no, we have not done that. Thank you. And follow-up, if I may. Follow-up. Thank you.

So I appreciate that very much, of course. And I don't mean to put you feeling like you need to defend this at all. I totally understand your concerns. I just know, for example, and I'm thinking through all the changes that I need to do in my home. The first one I'm gonna do is the roof because of mold in the walls and all the cost that's gonna come up even though I'd rather, personally, I really wanna change up the way the doors are set up because I don't think they're best for our dogs getting in and out or whatever, right?

There's all of these different things and your heuristic or your, you have a set plan here that's life, health, safety, envelope and shell, which feels like we're getting close there. But that to me seems an important consideration. As we know, we don't have enough money to do everything. And we know that we're seeing— and that was one of my questions— how much of contracting costs and building materials gone up as a result of either tariffs or labor costs, other things, because that's also important. So, you know, thinking about whether or not something is going to continue to get worse and making decisions accordingly also seems relevant when it comes to the prioritization.

But I do appreciate hearing that maybe that hasn't yet slipped into the consideration. It is something to be mindful of in the future. Thank you. Absolutely. Did I miss any questions?

I'm not seeing any. Please continue, Mr. Hodgin. Thank you.

And this is just our general process after the projects have been prioritized and after allocations have been distributed to the, to the project. So each project is unique, each project is different, but in general, projects may include some level of planning, design, and construction phases. They will vary with scope, they'll vary with intensity, and they might like change as the project, like, evolves and it goes. But they do offer opportunities for, for local and statewide contractors and engineering forces and architectural forces and consultants to participate with these projects. And then typically all of the projects we, we do a design development, we'll have a construction cost estimate.

This year we've seen construction cost estimates, like, more equalized than it has been last year. Last year there was a lot of fluctuation due to commodity prices, due to potential tariffs, but like lately, over the last couple quarters, estimates have been much closer to construction bids. But like as the projects go on and as they develop and as they complete, then any challenges or successes that the projects have, like we share that back with the Facilities Council.

And this kind of gives us some perspective, and I also believe is connected to some of the discussion that's been happening today. Funding recommendations and targets on deferred maintenance, there is no definitive rule on the level of preventative maintenance necessary or funding necessary to avoid deferred maintenance. But several years ago, there was research done by the National Resource Council. And in general, if there was possibility of 2% to 4% of the replacement cost value facilities that was able to be allocated to deferred maintenance, then that was a favorable target. So when we think about our portfolio as a state, excluding the University of infrastructure, of facilities infrastructure, the $7.3 billion, and that 1%, 2%, and 4% scale can be seen for us for scale and for perspective.

Representative Bynum. Thank you. Kuchair shragi to the chair, Mr. Hodgins, or director, correct? Let me get that right. I don't want to get it wrong.

No, not director. Project delivery team. I'm sorry about that. We promoted you to director.

So we talked about this being kind of this— there is no definitive rule, but has the department or the division established a rule? And if so, what is it? Mr. Hodgson? Thank you. Through the co-chair, Strage, and Representative Bynum, we— Our department, just to give some perspective to you and to kind of connect to these percentage scales that are here, we did do a facilities condition assessment on several of our facilities.

And through that study, that study also said that a 2% contribution towards deferred maintenance, 2% of the current replacement value, was a good target to maintain the condition of facilities as are. So to maintain facilities in a good or fair condition. So the study that we did internally kind of showed that and kind of reinforced that same lake value for us. Quick follow-up? Follow-up.

Thank you for that. We talked a little bit earlier in some of the slides, about scoring metrics and mechanisms being used. As we've said through many of these presentations we've received from different agencies, departments of education, they come to us and we will see them come to us with pictures of deferred maintenance of items that I would categorize as just neglect.

And then there's legitimate aged equipment, things that are breaking that need to be replaced due to age. I mean, all of this deferred maintenance ultimately comes down to that we don't have new facilities, but how much level of preventative maintenance we put into our facilities makes a big difference on life extension. Do we evaluate and/or score the departments on how well they're actually performing preventative maintenance so that when we're scoring the need, we can communicate to us, by the way, we probably should be making sure that our departments are directing more preventative maintenance dollars through the O&M process to relieve the need for the capital replacement or extend the life of project, or of projects and equipment. Facilities.

Mr. Gibson? Oh, or is this a question for Director Hodgin? Director Hodgin? Oh, I mean, I mean, I mean, uh, through the co-chair, um, Representative Bynum, I love that question. Like, uh, thank you so much.

Like, through, um, through— and we're always open to like different ideas of improving our ranking and scoring process and making it better. With the current scoring process, when departments present us the projects, there is a lot of vetting on is that— is that— does that project actually fall into the deferred maintenance realm, and is what is being requested by the department is it really a needed, like, project to maintain functionality of the particular facility. We do see, like, a lot of examples where the level of maintenance amongst various departments is— there's quite a vast range of maintenance capabilities and maintenance that is done, like, on those facilities. So we do see example projects where we go, well, this— this isn't— hasn't really risen to the level of critical that we have maybe seen with another department where we go, okay, this is actually like a critical need. And so with the Facilities Council, like, that is a something that gets vetted like through these meetings and gets vetted through the scoring process.

But, um, I love the idea of like having some sort of way to incorporate incorporate, like, how well the maintenance or preventative maintenance has been done, like, on a facility in the past. Thank you. Thank you. Thank you, Mr. Hodgson. I've got just a couple of questions myself that I think will be fairly straightforward.

The first question is just going back to the kind of example scoring.

Let's see, what slide is that? My apologies. Slide 11. Just the systems factor is kind of the condition of the facilities, is that correct? Mr. Hodgin.

Chair Schwargen, yes, for a particular system in the building, the condition of that particular system in the building, yes. As we've watched the deferred maintenance backlog grow over the years, I'm just curious, if you were to take all of these projects and assign them like a green, a yellow, a red value, with the higher the system factor being, you know, you're looking more towards red, it's more critical. Are we seeing kind of a shift of the entire catalog of projects more towards that red, more critical, because there's just so much backlog building up? Can you speak to kind of the overall value of those projects and whether or not they're getting more and more critical as time goes on and we continue to not, in my view, adequately appropriate funds to address the level of need that's out there. Yeah, thank you, Chair Schraggi.

I would say, like, over the last few years, we've seen the projects presented be more— I'm trying to think of the right word, but— maybe relevant or realistic projects in which, like, we're seeing— when we're seeing, like, roof replacement roof replacement projects or boiler projects or HVAC projects, we're seeing them presented by the departments in a more realistic manner. Because when they're not or when the projects become, like, questionable, then they drop down, you know, they are dropping down on the ranking. So I would see— so that's been my observation, is the projects that are being presented are the ones that actually have more need now. And that's kind of the realization that the Facilities Council has seen as they've been ranking them. Is it a correct way to— in kind of trying to summarize or simplify what you just said, we're seeing more projects submitted that are of that higher critical need level?

Yes. Is that the case? Thank you. Yes, yes. Thank you.

Back to slide 5, if we could quickly. We talked earlier about the use of capital income fund and direct appropriations to address the courts and the UA system. In terms of the capital income fund, we talked about OMB having some discretion in how to use those funds and to prioritize those based on all these factors that we have just talked about. But courts are separate from the administration. So in the instances where I see capital income fund appropriations to the courts, can I presume that those are all direct legislative appropriations using the capital income fund?

Or in those examples, is OMB telling the court system we have funds that we are able to utilize to address your deferred maintenance needs? Can you speak to that, Director Sanders? Chair Chiraghi, yes. For the record, again, this is Lacey Sanders. Um, the, the Office of Management and Budget is directing through a reimbursable services agreement funding to the courts in the university to address their urgent needs.

It is coming from the Alaska Capital Income Fund. This slide does not reflect any UGF or other direct appropriations to the university or the court system or any other agency for that matter. So if the legislature directed $2 million— just made up numbers— $2 million in capital income fund dollars towards the courts. That would not show up on this slide. Uh, through the chair, or Chair Schrag, um, that has not occurred.

Okay. Um, so the appropriation has been made to the Office of Management and Budget. And to that point, I'll just share for the committee's awareness, this year in the capital budget, we did propose moving it from the Office of Management and Budget direct to the, the Alaska Capital Income Fund funding will go directly towards, or excuse me, directly to the Department of Transportation and Public Facilities. OMB will still participate in the allocation of the funding, but we're trying to limit the amount of papers that we're moving around. So the money would go directly to DOT.

OMB would do the same process, which is, does the university need some? Does the the court system needs something or other agencies. And I think probably my final follow-up for right now before I go to Co-Chair Josephson, this year the Senate has proposed directing or directly appropriating capital income fund dollars towards MNT Edgecombe. There is nothing inappropriate about that, is that correct? And as a follow-up to that, would there be anything inappropriate about the legislature directing capital income fund dollars to the courts or to the university system directly?

Through the chair, or Chair Schrag, excuse me. The legislature has the power of appropriation. So the legislature can direct that money to wherever it wants to go. It has that, it's a designation to deferred maintenance, but the legislature could use that money for anything that it intended, for any state agency that it intended. So to answer, that answers both of your questions, I think, both of the— Department of Education and the university and courts.

Okay, thank you. Coach Ojosesun. The previous question gets right into the rub of the matter to me.

So you have a facilities council that tries to methodically go through, looks like an intelligent process, thoughtful. But you're saying even though, if the legislature says we'll appropriate $28.2 million, that's deferential. That's saying, you administration, we love your facilities council, go forth and prosper, do what you will. But the legislature can also spend this money almost like it's UGF and, and just targets things. Is that what you're saying?

Through the, through the chair, co-chair Josephson, the legislature has the power of appropriation and can determine where funding is spent. Were allocated. Um, past practice has been to appropriate for this list that we have worked to develop a ranking process for, but as the Senate's version of the capital budget does, it directs a portion of the Alaska Capital Income Fund to Mount Edgecomb High School projects specifically. That's the legislature's prerogative to decide where that money is— goes and how it's appropriated. Follow-up?

Follow-up? That sounds pretty interruptive of your approach. I mean, if you have a system failure at a building, how would you, short of a supplemental or something, how would you fix that if we've spent your capital income fund dollars? Representative Sanders? Through the chair, co-chair Josephson, that is an excellent point.

Right now, the process that has been utilized over the past years has allowed us the flexibility to work on emergency needs, true emergency needs, boilers failing in the Johnson Youth Center or something like that. Um, by directly appropriating it to projects, we lose that flexibility in being able to, uh, to, to administer the prioritized project, uh, list uh, ranking list. Um, and also, um, as noted right now, I believe it's, uh, close to $13 million is being directed at one, one facility, the Mount Edgecomb High School, um, in Sitka. And that only leaves about $12 million for the rest of the state agencies to address those costs. I will note that the, the Senate version did include a direct appropriation to the university and the court system.

Thank you. Representative Galvin. Thank you. I appreciate the opportunity, Co-Chair Schrag. This is again— sorry to beat this dead horse, but I do want to understand because I'm afraid that we may have been making allocations, but I think if I'm understanding you correctly, you don't expect to have a full accounting of what funds will be available for FY27 until August.

And I think you mentioned you think it'll be maybe between $15 and $25 million, but there's not certainty of what that number would be. Is that right? Through the chair, Representative Galvin, that's correct. So the process is that the Permanent Fund, Alaska Permanent Fund Corporation, is investing that money and there are earnings associated with it, and after the end of the year, they determine amount that will go into the Alaska Capital Income Fund. That generally happens in August.

So at this point, it's an estimate that we use, and we use the Permanent Fund Corporation's estimates for the purposes of developing a budget. But as we've experienced in the past, sometimes that amount isn't close to the amount that was estimated to be. And so that's where we got into the shortfall of having more projects allocated than what was actually deposited into that account. So we're waiting, uh, we'll wait till August to see what's put in, and then that's the amount that will be used going forward. May I follow up?

Follow up. So in FY25, um, some allocations were made and the drop didn't happen until roughly August from PFD, and at that point you had already overallocated the funds that you had. Is that what I'm— I want to make sure I'm hearing it right. Director Sanders. Through the chair, Representative Galvin, what you're saying is accurate, but it goes back even further.

Capital projects are multiple years. They extend at least a minimum of 5 years, so we're talking about some really old projects and really old deposits that didn't align. And so we have gone through going back in time and saying what should be out there for capital projects that was allocated? What was the actual amount that the permanent fund deposited in? And that is where we got to.

We are at about zero. We are going to pause. Final follow-up. Thank you, Co-Chair Schrag. [Speaker:DR. LISA SMITH] The question is, if we proceed with what we see that's already on my understanding in the works with regard to an allocation, and it seems like maybe that hasn't gone over, perhaps, I hope, the amount that likely will be dropped in August, then will we be able to be— I guess I just want to make sure we would be able to use these funds even if they're not yet in the bank, firstly, and secondly, if they weren't, if it didn't follow up, it didn't work out, and let's say instead it's, you know, $10 million or something instead of the $13, would we— how would that work out?

Would it become another supplemental budget item then so that we can follow through with that promise? How would that work? Director Sanders. Through the chair, Representative Galvin, there are a lot of ways to approach it. A supplemental request for the shortfall could be requested, or the amount that is actually received from the Permanent Fund Corporation is the amount that is utilized and nothing more than that.

That is the approach that should have always been taken and it wasn't. So that's how we got to where we are. Okay. Thank you. Okay.

I want to be respectful of our other co-chair and our Senate member who has a bill that they would like to present today. But we can take another few minutes. I know we have 3 members in the queue. But I would like us to keep our questions short and responses short if we can. I have Representative Hannan, Bynum, and Stamp.

Then we will wrap for for the day. Rep. Hannon. Thank you, uh, Co-Chair Schrag. My question is actually for either Mr. Hodgin or Mr. Gibson, and it's returning to Mount Edgecomb. Is repairs at Mount Edgecomb on the State Facilities Council ranked list of repairs?

And if so, where in the list? Mr. Hodgin. Thank you, Co-Chair Schrag. Through the chair, Representative Hannon, yes, the Department of Education is a member of the facilities council and they proposed Mt. Edgecomb projects to be prioritized on the list.

Off the top of my mind, I don't quite remember where the Mt. Edgecomb projects ranked like on the list, but we would be happy to share the last like ranking list for the committee. I think it is in your packets. I think we provided it. Thank you, Director Sanders.

We will look to our packets and if it is not there, we will work with you to make sure that we get that as follow-up information. Okay, maybe in the appendix. Uh, Representative Bynum. Thank you, Coach Asaragi. Through the chair to Director Sanders, I guess I'm going to ask this as a kind of a high-level question.

And you know, this is only my second year going through this process. When we get to this point, we get to the capital budget, and we talk about a few things as we go through this process. Number one, we talk about, um, preventative maintenance and the amount of money that we should be put Putting into preventative maintenance, we could argue where that should happen. I believe that should be happening at the department level all the way down to the division levels in our operating budget. And then we get to— [FOREIGN LANGUAGE] —recapitalization of monies that we should be technically setting aside for construction of new facilities.

And then we have deferred maintenance, maintenance on those facilities of items that are over a certain amount. And one of the parts that I struggle with is, is that we get a budget from the administration, and in my opinion should be outlining and laying out all of those needs. And then if we have revenue shortfalls to be able to not meet all those things, um, we as a legislature then need to make some hard decisions about deferring, uh, not funding fully, or, um, or figuring out other revenue sources. And so From OMB's perspective, are we in our operating budget putting the amount necessary that the administration needs to effectively take care of our facilities? Is that being put into the budget by the administration?

Secondly, are we putting in the budget the monies necessary to deal with this deferred maintenance outside of just giving us a list and saying, figure it out. So I'm just really trying to figure out, you know, are you guys asking for everything that we need to do to have healthy, healthy departments, healthy divisions, being able to effectively provide services to the public? And as we go through this process every year, I feel like the answer is no, but I might be missing something. So I just want to try to get the answer to those three things. Are we— are you administration providing that guidance to us to make those decisions.

Director Sanders, through the chair, Representative Bynum, I can agree with you that no, the administration is not. There is not enough revenue in this state. We do not have a statewide fiscal plan. We don't have the resources needed to meet every need that every agency has beyond deferred maintenance. Uh, we hear— I'm sure you guys hear— I hear— I receive numerous requests in the state, uh, for resources, not only for our state agencies but for those outside of our state agencies and our schools and, and beyond.

And until we have a methodology that provides something that's comprehensive, I, I there is no way to balance the budget and bring forward a budget that is balanced to cover every cost that we have in the state. Quick follow-up. Very quick follow-up. Thank you. With that being said, do you have a recommendation to us that we could look at to know on that O&M side what we need for preventative maintenance?

And then on the secondary side of that is outside of these lists that we can look at, maintenance money that we're gonna need for the backlog maintenance of deferred maintenance. And then of course, then we can make decisions on what we're gonna do for new capital as that comes forward. Do you have a recommendation for us other than what we're getting in a presentation here? Director Sanders. Through the chair, Representative Bynum, my recommendation is that the administration and the legislature need to work to find a comprehensive fiscal plan and build into it those pieces that you are talking about to be able to address all of the state's needs.

And until then, I don't have a recommendation on what is a correct level. It's an ad hoc process at this point. Thank you. Okay. Representative Stamp is up next.

Thank you, Chair Shiragi. Through the chair to Dr. Saunders, thanks for being here. I know I caught you at the tail end of this. It's just, I guess, you know, my question is going to be, we have a lot of lists that we are supposed to follow. Apparently no lists are sacred anymore.

So I am curious, if I go down the list, renewable energy fund, bond debt reimbursement, major maintenance list, school construction list, how many times has, and since you have been director, I guess, have folks just decided we would skip these methodologies that we put in place. And is there anything else in the current version of the capital budget that skips a list? Through the chair. Director Sanders. Through the chair, Representative Stapp, my time has only been a few years, so I will note that the lists have been followed in past practice.

I think The administration tries very hard to ensure that we have something that is methodical and always, as noted today, open to suggestions on making improvements. But we try to follow the list to the extent possible. Just a quick follow-up. Follow-up, Representative Smith. And the second part of that, Director, through the Chair, is going to be, do you know if they are skipping any other lists in the capital budget school major maintenance, maybe.

Through the chair. Director Sanders. Through the chair, Representative Stepp, school major maintenance list. I believe there is some skipping on that. I, I believe the renewable energy grant fund list is following the outlined list.

And I am not thinking of any other at this time. Okay. Thank you. Representative Stamp, were you referencing the skipping of the internal OMB process to fund Mount Edgecumbe or what were you referencing in terms of skipping lists? If you don't mind me asking.

Oh, yeah. Thank you, Coach O'Shaughnessy. We have right in front of us we have the Mount Edgecumbe example. I think there are plenty of ways to fund Mount Edgecumbe. You can do that with is to correct capital appropriation.

Doesn't need to be, you know, intentionally skipping this list. I mean, we— I think our— this system, not every system that we have in state operations, this system is a very thorough system. You know, there's a lot of vetting in these projects. And the whole reason that we do this as a legislature is to not make deferred maintenance like a political issue, you know. So I always get concerned when folks just kind of want to willy-nilly kind of overwrite things that were put in place for a good reason.

So, fair enough. I don't necessarily disagree with anything you've said. I just want to make sure I understood what you were saying in terms of referring to skipping around on the lists. So, Representative Allard, is this a quick one? I want to be respectful of the other co-chair, and we're running short on time here.

Really quiet. You have it. If it's very quick, Rep. Allard, please. It is. So, I just heard from representative from District 1 that— and you had responded, Director Sanders, that we just don't have enough money to take care of everything that's happening.

And I mean, at this point, we have to do our wants versus our needs. And so maybe the suggestion should be that all these bills that have gone through that have astronomical fiscal notes are not even big fiscal notes. Just need to be not passing or vetoed. And I'm just trying to figure out a way how we can do this because the longer we keep going, it's just going to keep building. Feel free to comment if you'd like, Director Sanders.

Uh, through the chair, Representative Allard, um, there's a lot of tough policy calls that need to be made, um, on both sides. Thank you. And I thought for sure Rep. Allard was going to bring up vacancy rates. With that, we're going to go at ease at 2:44 PM to transfer over the gavel. We're at ease.

Okay, I'll call this meeting of the House Finance Committee back to order. The time is currently 2:45 PM on Wednesday, April 22nd, 2022. And the next bill we have up is Senate Bill 41. That's the public schools mental health education bill. And I'd like to invite up Senator Gray Jackson, as well as her staff, Jimmy Bagley, as well as Mackenzie English Shoe, youth advisor for the Tendinah Chiefs Conference.

If you'd like to come up to the table, put yourselves on the record. And thank you so very much for being here. If you could go ahead and put yourself on the record.

Senator Elvie Gray Jackson, Representative District G in Anchorage. I want to thank you, Mr. Chair, and also the co-chairs for allowing me to introduce Senate Bill 41, Mental Health Education. This, I believe, is the third time this bill has been before this committee, and, and I'm hopeful that it'll move along this time. I also want to thank Representative Galvin for advocating advocating for this legislation with the companion bill, HB 105, that was heard last year in this committee.

SB 41 is a meaningful step towards strengthening mental health support for Alaska students and recognizing that mental health is just as important as physical health. This bill adds the integration of mental health education into our K-12 system by directing the development of age-appropriate guidelines in collaboration with state and national health experts as well as tribal health organizations. Alaska's youth face the highest suicide rate in the nation. In 2023, the suicide rate among Alaska's ages 10 through 24 was 42.3 deaths per 100,000, and Alaska's overall rate is nearly double that national average. The challenge is even greater in rural communities where suicide rates are roughly 2 to 3 times higher than in urban areas.

These realities highlight the importance of providing students with early education and support around mental health so they can build awareness about their well-being, developing self-regulation skills, and navigating everyday mental health. Senate Bill 41 also upholds parental rights by requiring schools to notify parents at least 2 weeks before any mental health instruction is provided to their children. To create transparency, the boards will submit a report to the legislature within 2 years outlining the guidelines and how they were developed. Ensuring students understand and care for their mental health is an investment in their well-being and future success. By strengthening mental health education, Senate Bill 41, it helps equip students with the tools that they need to thrive.

In and outside the classroom. I respectfully once again for the third time ask for your support for Senate Bill 41. Thank you, chairs. Great, thank you very much. I'm going to jump right into the 3 testifiers we have and then we'll go to questions.

So I'll put folks in the queue. And so with that, first up we've got Mackenzie English Shoe, youth advisor for the Kenanaw Chiefs Conference. Thank you so very much for being here, and if you could just put yourself on the record. Mackenzie Englishoo, Youth Advisor to the Executive Board of Tanana Chiefs Conference and Chair of the Emerging Leaders Youth Advisory Council, where we represent 42 communities. Okay.

Masi Cho. So my testimony, shoshreit Mackenzie Englishoo, ozhreit gwichaajay gwatsaan ishia. Gah, um, dinjinjukia, gogwal'ay, aigahonjukjat nan gwitch'ee, tru'ath'ida, UAF, gwatsa'ishia, gwich'in, Isthli, um, and youth advisor and chair of Emerging Leaders. And that was just my introduction. My name is Mackenzie Englishoo.

I'm from Port Yukon, but I'm currently learning my ancestral language up at UAF. Last Native Language Center, and I am Gwich'in, and I'm very grateful for each of you allowing me to be here today to testify to you all. I'm here today in strong support of Senate Bill 41, mental health education. I would like to thank Senator Grey Jackson for the invitation to speak as well. As a young person, [Speaker:KAYLA] As someone who works really closely with the youth of our region in the Tannenaut Chiefs Conference region, I've seen firsthand how mental health challenges are impacting our generation.

This is not something that is distant, but it is something that we are living through every day. Many of our young people are carrying anxiety, depression, grief, and intergenerational trauma, and they're often doing that in silence. One of the biggest barriers we have as young people is not just access to services, but it's, it's the understanding of what's going on with our own bodies and in our own mental health and having understanding from others. And as a community, many students don't have the language or the education to describe what they're feeling. And they may not recognize when something is feeling really heavy or they end up feeling shame or disappointed in themselves for feeling that way and for needing to speak about it with people.

And that silence can feel really damaging to our young people. Senate Bill 41 is important because it gives young people the tools to understand their mental health early. Students recognize signs of distress in themselves and in their peers, and it teaches them that asking for help isn't a weakness, but it is a strength. And that kind of education, especially about mental health, can say— can change lives, but in a lot of cases, it can save them too. This bill is especially important for rural and Indigenous communities.

In many of our villages, there are limited mental health resources available. Schools are often the one consistent place where young people can access support, and that's often in one another. By incorporating mental health education into the classrooms, we are creating a foundation of awareness and care that teaches— that reaches every student in those rooms and of our communities. I also want to acknowledge the importance of including tribal health organizing organizations in developing this curriculum, especially when it's going to be back home in our regions. Our communities have had their own ways of understanding through traditional wellness and healing and balance our way of life.

Ensuring that this education is culturally responsible will make it stronger and more meaningful for youth, especially in the villages. And as young people, we're often told that we are the future, but we also are right here now in the present. We are asking for support now so that we can grow into that future in a healthy way, grounded in both knowledge and identity. And Senate Bill 41 is not just about education, it's about prevention, it is about dignity, and it's about making sure no young person in Alaska feels alone in what they're going through. So I respectfully ask for your support in bringing forward Senate Bill 41 and ensuring that it is implemented across our state.

And merci, Chair, for your time and the opportunity to speak and the work that each of you do. Nidivijegwinsi, which means I wish you luck on your path. Great. Thank you very much, Ms. English Shoe. There may be some questions here, so we will go to the next 2 testifiers and then we will open up for questions.

So thank you for your invited testimony. The next person we have up is James Biela, American Foundation for Suicide Prevention, the Alaska chapter. Mr. Biela, I think you're online. If you could put yourself on the record, just state your name and your affiliation.

Good afternoon to the co-chairs. My name is James Biela. I live in Bethel, and I'm calling in today on behalf of the American Foundation for Suicide Prevention. The Alaska chapter. I am a volunteer and one of the co-founders of the chapter and currently serve as the vice chair of the national public policy of AFSP.

That's my volunteer job. Full-time, I'm an itinerant school social worker, and I'm calling to respectfully ask for the House Finance Committee to pass Senate Bill 41, the public school mental health education. Suicide prevention is is deeply personal to me. I am a suicide loss survivor. I lost my best friend to suicide in 2009, and with that experience is why I continue to raise my voice for those who have suffered in silence and that are now no longer able to speak for themselves.

Suicide is the second leading cause of death nationally and in Alaska for young people ages 15 to 24. Has the highest suicide death rates for this age group. At the American Foundation for Suicide Prevention, we often say, "Talk saves lives." Since last July of last year, the Lower Kuskokwim Region have seen a significant increase in mental health concerns with substance abuse and suicide. Tragically, 5 students between the ages of 15 and 17 have taken their lives. In addition, 3 recent graduates from 2025 have taken their lives.

I personally knew those young people. All 8 of those youths had severe trauma ranging from sexual, physical abuse to finding their loved one who died by suicide, even to the aftereffect of a typhoon. They did not understand how this trauma affected their mental health. Mental health education gives young people the tools to understand their emotions, recognize when they or a friend may need help, and know how to speak— seek out support. In a state like Alaska, where many communities face higher rates of suicide, providing students with knowledge and language around mental health can be life-saving.

Senate Bill 41 supports the development of guidelines for mental health instructions in our schools through consultation with the Department of Health, Department of Family and Community Services, regional tribal health organizations, and representatives from national and state mental health organizations. If Senate Bill 41 helps even one student to find the courage and the language to ask for help before it's too late, then we will have done exactly what it's meant to do. To save a life. Senate Bill 41 does not mandate a specific curriculum. It simply brings partners together to develop guidelines so schools can help students understand mental health the same way they learn about physical health.

Senate Bill— Senate Bill 41 does not exclude parents. Parents are welcome to review the material. It does not give teachers the ability to diagnose students. School districts have an opt-in/opt-out of the curriculum once it is developed. Senate Bill 41 again supports the development of guidelines for mental health and instructions.

Most of all, it begins to talk about saving lives. On behalf of the American Foundation for Suicide Prevention, the Alaska chapter, and all the suicide loss survivors, I respectfully ask for your support in moving Senate Bill 41 forward. When we give the young people the language to talk about mental health, the courage to ask for help, we are not just teaching a subject, we are saving lives. And thank you for your opportunity, my— the opportunity to testify. Great, thank you very much, Mr. Bila.

And if you could stay on the line if possible, there might be questions. We've just got one more testifier, and that's Mr. Trevor Storrs, President and CEO of Alaska Children's Trust. And Mr. Storrs, if you can put yourself on the record.

Good afternoon and thank you. For the record, I'm Trevor Storrs, President and CEO of Alaska Children's Trust. As a statewide lead organization focused on the prevention of child abuse and neglect, ACT supports policies that promote the health and well-being of Alaska's children and families. That is why we support SB 41. The need is clear.

According to Kids Count, 2 out of every 5 high school students in Alaska report feeling persistently sad or hopeless for an extended period in the previous year, a nearly 60% increase in the past decade. Suicide has been the leading cause of death for Alaskans aged 15 to 24, with the rate remaining at 42.3 per 100,000. As recently as 2023. That is among the highest of any age group in the state. In 2023 as well, 24% of high school students reported having planned a suicide attempt in the previous year, 33% reported experiencing bullying, and 25% of Alaska's children experienced one or more diagnosed mental health challenges.

These numbers show that Alaska students should benefit from mental health education and would. Just as we don't wait for a child to get sick before teaching them about the physical health, we shouldn't wait for a crisis before teaching them about mental wellness. Early awareness reduces stigma. When students learn to recognize symptoms in themselves and in their friends, peers, they are more likely to seek help for themselves and, more importantly, their friends. Mental health literacy is a life skill.

Teaching coping strategies, emotional regulation, and help-seeking behavior in school gives students the tools they will use for the rest of their lives. Research shows that school-based mental health programs are associated with lower rates of depression, anxiety, and suicide ideation. SB 41 doesn't mandate a curriculum. It supports the schools and most importantly parents who choose to include mental health education giving communities the tools they need without imposing a one-size-fits-all approach. And by cementing mental health as a component of wellness across Alaska, parent notification encouraged further dialogue between parent and child, a very important protective factor.

We encourage your support of SB 41. Thank you for your time today and happy to answer any questions. Great, thank you very much, uh, Mr. Stores. I do want to, before I go to Representative Bynum, Representative Galvin, I think, has just an important thing that should be noted. Well, thank you, Co-Chair Foster.

I just wanted to make mention to the public who might be listening. Oftentimes when we talk about suicide, we also make mention to anyone listening, anyone, you matter. If you're experiencing any suicidal ideation or thoughts about suicide, there is an opportunity for you to reach out right now by dialing 988 or by texting 988, and I encourage you to do so. Thank you. Great.

Thank you. It's really appreciated. Representative Bynum, question? Yes. Thank you, Co-Chair Foster.

Through the chair, Senator, thank you very much for bringing this forward. I appreciate your time here today and representing the bill. I did want to just clarify that I believe this is the companion bill to HB 105, uh, that Representative Galvin was carrying, and then that bill has passed out of this committee already with the, with the full, uh, full hearings and public testimony and all of the things. And my understanding is this is an identical bill to that and that neither one was amended. Is that Is that accurate?

Senator Gray Jackson. Through the chair, Representative Bynum, it's been out here for a very long time, and the original bill was amended when Senator Wilson was in the Senate, and it was amended to add the parental section of the bill. Thank you, Mr. Chairman. Thank you, Representative. Maybe just to add to that, just Very quickly, I'll just add, this is the very same bill that you saw last year, and I cannot thank the senator enough for her leadership and persistence and making sure we get this across the finish line.

So that it is the same bill. Thank you. Thank you. Senator Bynum? No further?

I just wanted to make sure that we were— it was identical to what we've already heard and that there were no changes in the Senate on your version the bill and there were no changes in the House on Representative Galvin. If I can follow up, Mr. Chairman. Senator Gray Jackson. Thank you.

The change that I mentioned happened several years ago before there was a companion bill in the House. So for clarity, sorry about that. Thank you. No, thank you very much. Okay, do we have any further questions or comments for the sponsor or any of the testifiers?

Okay, we'll take a brief at ease, and I think we're going to come back to Representative Jimmy. So, brief at ease.

Okay, House Finance back on record at 3:04 PM on Wednesday, April 22nd, uh 2026. And, um, maybe if I could ask Mr. Anderson if you could please come up. And it sounds like there's some interest, uh, sounds like many questions have been answered. We don't have really any questions at this point, and there's an interest from the committee to go ahead and maybe walk through the fiscal notes, which they look like they are zero fiscal notes. Or no, there's one that has a dollar amount here.

And Mr. Anderson, if you could just walk through those, maybe just to make sure we've got the same as what you have before you. If you could read the control codes and we'll walk through those. So for the record, Brody Anderson, staff to Representative Foster. Before the committee today are 3 fiscal notes. The first one is from the Department of Health.

Behavioral Health Allocation, Behavioral Health Treatment and Recovery Grants, OMB component 3099, control code MDYND. This is a zero fiscal note, and the impact to the Division of Behavioral Health is a zero impact according to this fiscal note. The second fiscal note in front of the committee is from the Department of Family and Community Services. Alaska Psychiatric Institute allocation. Alaska Psychiatric Institute.

OMB component number 311. Control code JVL ET. This is also a zero fiscal note. The department has indicated that they have no anticipated fiscal impacts because of this legislation. The third fiscal note is for the Department of Education and Early Development from the Education Support and Administrative Services allocation, Student and School Achievement, OMB component 27, 96, control code PVZGA.

This one has a fiscal note impact of a total of $216,000 of UGF. It is broken down into the following components. For travel, $120,000 in— for 30 committee members to travel twice a year, which is roughly $2,000 per participant. In services, there's $36,000 for services, including $30,000 to hire a facilitator to oversee and implement, and implementation and professional development for the educators, and $6,000 for legal fees. And then finally, $60,000 for grants and benefits to go towards a stipend to pay for each one of the participants.

Mr. Chairman, that summarizes all 3 of the active fiscal notes. OK, thank you. Do we have any questions regarding fiscal notes? Representative Tomaszewski. Thank you, Co-Chair Foster.

So these 30 committee members, where do they come from? Who are they? And Yeah, I guess who are the 30 committee members? Through the chair—. Senator Gray Jackson.

Thank you. Thank you, the chair. Representative Thomas Zueske. Did I pronounce that correctly? Anyway, the board is going to develop guidelines working with folks from the Department of Health, Department of Family and Community Services, regional tribal organizations, and representatives from national and state mental health organizations.

So the fiscal notes provide for up to 30. So that's the number of folks from these different agencies that are going to be working together again with the board to develop the guidelines. Thank you. Thank you. Do we have any further questions on the fiscal notes?

Okay, seeing none, uh, it sounds like there might be an interest in moving the bill. We do have a member who would like to be here. He said he was just going to step out for a few minutes, so we're just going to take a brief at ease and then we could come back and discuss whether or not that is something we indeed want to do. So, Representative Stepp, do you have a question? Yes, since we have some time here, Co-Chair Foster, I just maybe question to the bill sponsor.

Um, there's a letter in the packet from the Citizens Commission on Human Rights and Looks like they have some critiques. I'm just curious if you had a rebuttal or anything like that. Through the chair to Senator Gray Jackson. Senator Gray Jackson. Thank you.

Through the chair, Representative Staff, I'm going to ask my legislative aide, Jamie, to respond to your question. Thank you. Bagley, if you could put yourself on the record. For the record, Jamie Bagley, staff to Senator Gray Jackson. Thank you, Representative Satt, for that question.

From my memory, I'm trying to remember the letter. Can you refresh my memory? Yeah, I'll go through a couple of them if that's okay, Co-Chair. Can I stand? Yeah, I think Co-Chair Foster's the chair.

So I guess the first critique they have is I guess they feel like the language in the bill is vague and overly broad and doesn't address the challenges of mental health in schools. That's, that's a summary, I think, of the first critique of the letter through the chair. Ms. Bagley.

Yeah, thank you. For the record, Jamie Bagley.

Um, so from my understanding, um, the intention of this legislation was to— I'm sorry, would I be able to refer— I would like to refer to one of our invite testifiers actually for this question. Okay, we've got a number of people online here. Um, is there anyone who would like to tackle that question? Mr. Chairman? Senator Gray Jackson.

Just one brief comment. That's the idea of having these different organizations and committee ultimately to work together to develop guidelines to address any concerns that anyone may or might have. Thank you, Mr. Chairman. Is there anyone in particular that— any of your testifiers that you think might also like to add to the response?

Senator Cray Jackson. Thank you, Mr. Chairman. I think Mr. Beale would be probably honored to answer that question. Thank you. Very good.

Okay. Mr. Beale, if you're there, if you'd like to answer the question, we can rephrase it or repeat it if necessary.

Mr. Beeler, are you there?

Okay. Representative Stout? I mean, I'll take it from anyone online. I mean, I'm just— I was just buying time for Representative Bynum, so I figured I'd ask a question through the chair. So Representative Bynum's here.

He's back. Thank you. Welcome back, Jeremy. Thank you, Ben. Representative Sharkey.

I'll just, looking at this, who is the Citizens Commission on Human Rights? Looks like an out-of-state group and their intro is, as drafted, it is vague, overly broad, and will end up being government-paid education creating a conduit of mental health patients hooked on psychiatric drugs. I just don't even know how that is an even remotely reasonable conclusion from reading the bill, and I don't find that their supporting arguments that follow really support their initial statements. So they may have some concern, but it seems a little bit absurd to me on its face. So I'm going to go ahead and file this in the nonsensical If I may, Mr.

Chairman, I have another comment. First, Senator Gray Jackson. Thank you. Through the chair, Representative Schrag, thank you for jogging my memory, but that organization is out of state, number one. They always testify.

They're hooked up with Scientology. Not that I'm saying anything is necessarily wrong with that. It's not my choice. And they're simply not credible. But again, thank you for jogging my memory and to represent —step.

Thank you for bringing that up. Thank you, Mr. Chairman. Okay. Representative Galvin, did you have a comment? Just a quick comment.

I concur very much, and I have spoken with that group to better understand where they're coming from, and it wasn't easy to do. But I do want to call the committee's attention to several other letters of groups who I think you're familiar with. We have NAMI Alaska, which is very well known, the National Alliance on Mental illness, and this is Alaska. We have the Volunteers of Alaska, VOA Alaska. Of course, you've already heard from Alaska Children's Trust, and you've heard from the American Foundation for Suicide Prevention Alaska.

So— and we've heard from— there's a Fairbanks group here that's paying attention, the ND Systems Mental Health and counseling. APRN Alliance is speaking up and they, you know, all of these other groups are ones who you may be familiar with since you have been so participatory with the mental, at least with the healthcare field, Representative Stapp. So I think there's a lot of other groups perhaps you could lean on if you were wondering where Alaskans are weighing in. Representative Staff, any further? Yeah, just a quick comment, Co-Chair.

Yeah, thanks. I, like I said, I probably was a little politer than my colleague Koker Shrage when I was reading this. I was just curious because it's very out there, I guess. So I don't have any more concerns, though. I just wanted to talk about it.

Representative Pannen. Thank you, Co-Chair Foster. And I think Since, you know, we started with this letter of inquiry— or not, a letter of opposition that jumps to some statements about, you know, making kids fixated on psychoactive drugs, etc. And I think that distracts from the point that kids need to learn that varieties of— that a normal human condition will have a wide variety of ranges of expressions in emotions. And, you know, teaching a 2-year-old that dealing with their frustration that results in a tantrum is a normal 2-year-old behavior.

And especially when you get to adolescent years, them coming to understand that changes in their emotional state is normal and trying to differentiate when they may need to get help if it's outside the normal range. You know, fixating on suicidal ideation is not a normal response to not having the right dress for prom, but worrying about going to prom is a normal teenage thing. And I think that's the essence of this bill, is is getting kids information to help them seek professional help if they need it and turn to a doctor if they need it, but understand, um, being really disappointed about failing their driver's test is the normal reaction to failing your first driver's test, which is a normal course for many kids. Um, so jumping to conclusions that this is going to include people being diagnosed or hooked up psychoactive drugs, I think completely misleads what the bill is about. And I'm, I'm a supporter of the bill, so I'd like to see us take affirmative action on it.

Senator Jimmy, thank you. Co-chair Foster, I thank you first of all to the sponsor, Senator Gray Jackson, for House Bill 41, and everybody who testified. Thank you, James Biela, for working with this for many years, and you, Mackenzie, for giving us— drawing your voice. Always matters, especially with the youngs. And I'm so happy to share there's a letter of support here too from Tuxw'k'vay.

Um, just to name a few kids, we've got Felton Woods, Brianne Wiseman, So if you're getting letters from villages, this is very good needed. Excuse me, but thank you. I want to recognize that Representative Jimmy, you sponsored a very powerful film, and so that's, I think, helped to advance this cause. So thank you.

And sponsored the viewing of that. Let's see here.

Okay. So with that, normally what would happen is we would set an amendment deadline before moving the bill. And I just want to make sure if there is no desire from any member to move— make amendments to the bill, then I would certainly be open if it was desire of the committee to move the bill. And so if that is the case, is there anyone who would like to make a motion? Representative Sharagi?

I would be happy to, Co-Chair Foster.

I move that we pass out of committee Senate Bill 41, work order 34-LS0078/n with individual recommendations and attached fiscal notes. Okay, do we have any objections? Okay, seeing none, Senate Bill 41, which is version 34-LS0078/n, is moved out of House Finance with attached fiscal notes and individual recommendations. And so with that, if folks can be sure to stick around to sign the committee report. Senator Gray Jackson, is there anything you'd like anything to add in closing?

Thank you, Mr. Chairman. I'm just so grateful the bill is moving out today. Thank you. Okay, we really appreciate your work on this, so thank you. So with that, our next meeting is scheduled for tomorrow morning at 9:00 a.m., and at that meeting we'll hear the introduction of Senate Bill 214.

That is the capital budget. And so If there is nothing else to come for the committee, uh, thank you to everyone, and we'll be adjourned at 3:20 PM.