Alaska Legislature: House Finance, 4/16/26, 1:30pm

Okay, I'm going to call this meeting of the House Finance Committee to order and let the record reflect that the time is currently 1:39 PM on Thursday, April 16th, 2026. And present today, we've got Representative Allard, Representative Moore, Representative Bynum, Representative Kocher-Schrage, Representative Kocher-Josephson, Representative Galvin, Representative Tomaszewski, Representative Hannan, and myself, Kocher-Foster. And just a reminder, folks can mute their cell phones. And, um, before we start, uh, let's see here. Actually We have two items on the agenda today, although I believe it's actually three.

We've got House Bill 210, police and firefighters disability bill. We will review the fiscal note, we'll take questions, and we'll set an amendment deadline. Then we'll take public testimony on House Bill 77, that is the mail theft bill, and then we'll review the fiscal notes and set an amendment deadline on that as well. Finally If time permits, we had this morning House Bill 193, and if we've got time, we'll take that up. That is the Paid Parental Leave bill, and that meeting this morning, of course, was canceled.

We do have a hard stop today at 3:30, so we'll get through as much as we can today. So with that, starting off, we have House Bill 210. That is the Peace Officers and Firefighters Disability Bill. And I'd like to invite up Representative Kopp as well as his staff, Ms. Julia O'Connor. If you could please come to the table, put yourselves on the record and give us a brief recap of the bill.

And then from there, we will go over to— let's see here— fiscal notes. And yeah, so Representative Kopp, thanks for being here. Thank you, Chair Foster. Mr. Chair, members of the Senate, and Finance Committee members.

So recap, House Bill 210 addresses a gap in how we support peace officers and firefighters who suffer permanent career-ending injuries in, in the line of duty. So today those individuals receive just 40% of their salary, or a 60% income loss overnight after the disability occurs. And that loss is compounding because most of those employees also lose their employee-sponsored healthcare, as we learned, because you can only have your employee-sponsored healthcare if you're not on disability. So once you're appointed to disability, you lose 60% of your pay and your healthcare. So House Bill 210 makes a targeted, responsible adjustment, we believe, by increasing the disability benefit only to 75% of salary after the first year of disability.

So you'd remain at 40% like it is now in the first year, but when you go into year 2, which you'd have to be approved for a year 2 disability status, it would go to 75%. The bill is narrow in scope, impacts only a small number of public safety employees, and it does not expand eligibility or restructure the retirement benefit system. I think important for the Finance Committee It's funded through existing, well-funded disability trust. That disability trust is currently at 421% funding level. So there's no new program or no new significant cost.

We believe that at its core, this is simply about fairness and responsibility, ensuring that when someone is permanently injured protecting our communities, the benefit they receive reflects the risk they took. Thank you, Mr. Chairman. That's the bill in a quick summary. Okay, great. Thank you.

I would like to— let's see here— address the fiscal note we have got in the— let's see— online, Mr. Brandon Roomberg, Chief Financial Officer for the Division of Retirement Benefits. And I believe— looks like you are online. And if you could just confirm your name and your title, Mr. Roomberg, and walk us through the fiscal note. If you could also just confirm the control code that you have on your fiscal note.

Good afternoon through the chair, uh, Brandon Roomsburg, Retirement Manager for the Division of Retirement and Benefits. For the division fiscal note, at this time we did put out a zero fiscal note. However, in the analysis section of the fiscal note, we did put down that we do anticipate this to incur some programming costs. To implement this legislation for programming into our benefit and retirement system program that we're currently in the development of. That cost is not currently known at this time.

So we do hope to update later as needed. [Speaker] Okay, and just to confirm, your control code on that is HN HFA, is that correct?

Through the chair, yes. Okay, thank you. Okay, we do have a question from Representative Josephson and then Hannon. Representative Josephson. Thank you, Mr. Chairman.

Question for Mr. Roosberg. Mr. Roosberg, your colleague at Centralized Administrative Services wrote a fiscal note on what I'm told is a companion bill, word for word, by Senator Giesel, and that also has a zero fiscal note but doesn't make note of any concerns with programming costs. Can you explain why you and your colleagues see this somewhat differently? Mr. Rubensberg. Through the Chair, thank you.

I unfortunately have not reviewed that bill. I would have to take another look at that before I could accurately respond. But I would imagine that it wouldn't have to incur any kind of programming costs for the new system that we're currently developing.

Okay, thank you. Okay, next up, Representative Hannan. Thank you, Co-Chair Foster. Mr. Rumsberg, I want to just affirm that you're— when you're saying programming, you mean computer programming that you are undertaking currently? Mr. Rumsberg, through the chair to Representative Hannan, that is correct.

And follow-up? Follow-up? Thank you, Co-chair Foster. So, Mr. Rumsfeld, could you tell us the completion date that you expect for the current change to your computer programming? What I'm trying to get at is if this bill was passed prior to it being completed, trying to adjust the programming while it's being designed versus retroactively changing that.

So trying to figure out where you are in the reprogramming of retirement benefits computer programming. Mr. Rumsberg.

Through the Chair to Representative Hannan, I'm not an individual that's participating on the BARRIS program, so I would have to check with those folks and provide you a follow-up response. Okay, thank you. Okay, Representative Galvin. Thank you. Firstly, I have a A brief question for the sponsor, and I think perhaps you've already answered this, but as far as you know, how many individuals currently would this apply to, this bill?

Yes, through the chair, Representative Galvin, there would be 16 public safety officers that it would apply to. They're currently in disability status. Thank you. And if I may ask a question of Mr. Runzberg. Representative Galvin.

Thank you. So I think what I'm understanding, Mr. Runzberg, is that you're undergoing a systemic change, that it would be for all of the work that you're doing. And if we were talking about adding perhaps 16 people to be mindful of, I guess, with this, with this bill needing a different sort of, I guess, equation or a lane, if you will, for this meeting the different metrics that have been— would be in place. Are you thinking that the 16 individuals would be creating a larger problem for you, or is it that you are just trying to work out finishing what you're already working on. Mr.

Rumsberg, uh, through the chair, um, we do not anticipate that these people would cause any kind of a problem to the programming of the system. No, it's just programming that has not been taken into account yet because it's not currently within our statutes. So we would just have to remap the models that we are doing with our modernization project to account for this bill should it pass.

Okay. Thank you. I think I'm going to assume from my own mind, since I know DMV has had to make some changes when they— there's new rules, it typically doesn't require an entire PCN. So I'm hoping that this will be something similar to that, which would be pretty minor. Thank you, Mr. Runesberg.

Okay. Do we have any further— You're welcome. Thank you. Do we have any further questions of the committee? Representative Hannan.

Co-chair Foster, do we have somebody else from Retirement and Benefits besides their admin services? Because I do have a— before I undertake potential amendments, I have a question that I want Retirement and Benefits to ask. I want to ask of them. We do have online Christopher Novell, Chief Financial Officer for the Division of Retirement and Benefits. Would this be the appropriate time?

Sure. And his name was? Mr. Christopher Novell. So thank you, Co-Chair Foster. Mr. Novell, as I read definitions for occupational disability, it appears to me that we use two different definitions, one for people who have a defined benefit plan and one who have a defined contribution plan.

And my question is, are those two different— those two definitions administered the same way or are they administered differently for defining their disability? Mr. Novell, if you could put yourself on the record. So I put myself on the record. Here is Christopher Novell, Chief Financial Officer for the Division of Retirement and Benefits. Through the Chair to Representative Hannan, I take note of your question.

I will have to get back to you. I don't know the answer right now.

Okay.

All right. Yes, but it does appear that you have two different— each of the plans has a different definition of what job availability, whether you are disabled from your job status or not. And since that's the nexus of you are disabled from the job you had, what I need to just understand is if you are— if they are being administered the same way, then it's an immaterial difference. But if it is being administered differently depending on which plan you're on, it's a material difference that I want to address in the bill. So thank you.

Okay. Representative Bynum. Thank you, Co-Chair Foster. To the chair, I guess I had a very similar question that Representative Hannan had, but in addition, I had a question with regard to the requirements for the vocational rehabilitation requirements. The last time that this was brought forward, I was asking specifically about all of the benefits that were included.

Whether you're in defined benefits plan or whether you're in defined contribution plan. There was information provided to the committee that specifically outlines occupational disability benefits if you're in defined benefits plan, but the information provided for anyone that's in defined contribution plan is very limited in nature and doesn't— there's not much information here. And so I just don't— it's really difficult for me to try to make a decision on what we're going to be doing with the bill and again with amendments without understanding the complete difference between the two specific benefits that are being provided under the different tiers. So, I mean, if there's somebody from Retirement and Benefits or that's dealing in this space that is able to provide that additional information, it would be extremely helpful. Maybe Representative Cobb?

Yes, Mr. Chair, Representative Bynum. I'm going to go a little bit off memory here, and DRB is online, they can correct me if I'm wrong. But under the current plan that we're in now, the DC plan, once a member is appointed to disability benefits status, from that date they have 30 days to enroll in the disability vocation rehab, the DVR program. And if they don't enroll within 30 days or if they fail to maintain compliance with that program, they can lose their disability benefits.

So, because the purpose of the DVR is to rehabilitate you and to get you, of course, back to work. So, again, you have a 30-day window to enroll and then you continually have to be in compliance with the occupational disability vocational rehab program. And I would welcome response from DRB if I got that wrong. Either Mr. Rumsfeld or Mr. Novell, do you have any comments?

Through the Chair, this is Brandon Rumsfeld, Retirement and Benefits. Representative Kopp quoted it accurately. Okay, thank you. Representative Bynum. Follow-up.

Thank you. Through the Chair, Mr. Rumsfeld, is that— so are the mechanisms that we have in place for somebody that's going to be on occupational disability, are those requirements the same then whether you are in a tier plan that is a defined benefit or defined contribution? Mr. Rumsfeld. Through the Chair, yes, the DBR requirements are the same between both the DB and the DC system, yes. Another quick follow-up.

Representative Bynum. So then the distinction The distinct differences in the plan really revolve around the idea of whether or not a healthcare benefit is carried forward or not and some of the other occupational disability benefits that might be listed specifically in one plan or the other. Is that fair? Mr. Roosberg. Through the Chair, that is accurate.

And then I have one follow-up. Representative Item. Thank you. When we look through the disability benefits that were provided in the packet for the defined benefit plan tiers, there is some inference in here about the tax liabilities that may or may not apply, and it indicates that if the calculated disability was set at 40%, that those may be not considered taxable income. Do we know if, if this, this were to go into law where we change the benefit beyond the 40%, does that trigger a tax liability that may have otherwise been non-taxable?

Mr. Rumsfeld, or is that Representative Kopp? I would defer to DRB before I take a crack. Okay, Mr. Rumsfeld. Through the chair, thank you. I would want to follow up and look into that for you.

Okay, then a quick follow-up. Representative Bynum. Thank you, Co-Chair Foster. The follow-up would be if we look up and look into that and to see if the same restriction or change would apply to those that are in a defined contribution tiered plan.

Okay. I think Mr. Rubensberg, probably no comments. Through the Chair, I will ensure to look at both systems. Okay. Do we have any further— Representative Cobb?

Yeah. I just wanted to say, Mr. Chairman, I do know the general rule on disability benefits is that they are nontaxable. That is the general rule. I don't know the answer to the specific question if we went to 40 to 75. But I don't think that matters.

I think a disability benefit by definition is not a taxable benefit if you are in fact in a government-sponsored disability benefit program. But DRB will give us the final word on that. Okay, real good. Representative Galvin.

Well, thank you, Co-Chair Foster. I guess this gets us into a lane that feels a little bit abstract because it's hard for us to know about everyone's tax implications. I just want to be careful. We don't know what folks own, what— you know, I think if we get into that and worry about that, to a degree it feels— even when we're hearing from those who are working with the division, they're not financial consultants. So I just— I'm concerned about that too, because I don't know that we would know everything about that individual and their holdings.

Any— Representative Bynum? Thank you, Co-Chair Foster. As a follow-up to that, I brought it up specifically because the Alaska Division of Retirement Benefits clearly point to that and they specifically talk to it. So when we look at the plan summary, they do talk about what is considered taxable or non-taxable, and there are certain options that that are available under the defined benefit tiered plans that do talk about other options that will then become taxable events. And so there's a lot of other information.

That information is not specifically available from what I've been able to see in the defined contribution tiers, and it clearly outlines the 40% number, which is what the current law is. So I would— assume that retirement benefits and/or their consultants should be able to tell us that if we are making a change in the law, that it would have a specific tax liability to the recipient. That's why I brought it up. Representative Josephson. Thank you, Mr.

Chair. Representative Kopp, I like this bill very much and I'm going to be supporting it. I do have a question, though, about the health care portion. So this is for peace officers. Essentially permanently disabled such that they can't work in their previous capacity and they're increasing their receipt of final pay from this 40% to 75%.

What are we doing about their healthcare? What happens statutorily there? Rep. Kopp. Through the Chair, Rep. Josephson, nothing. This bill does not address that.

[Speaker:CHAIR] Okay, Representative Bynum. [Speaker:REP_BYNUM] Thank you, Co-Chair Foster. Through the Chair to Representative Kopp, I was thinking the same thing along the lines of what Representative Josephson, Co-Chair Josephson was saying in that we see that there is definitely a disparity between the healthcare benefit that's being carried forward in the different tiers. And to me it seems like a pretty big— a pretty big issue for somebody that's actually being disabled and not being able to work and they actually don't carry forward health insurance. So is there an alternative health insurance that does kick in that would apply in the event that we have somebody that's on occupational disability benefit or are they only receiving a health benefit as a carryover and until they've been— deemed healthy enough to either not be on— under medical— current medical care, or— I'm just not sure that I understand what the implications are when somebody gets put into this status for carrying their health insurance, because I do read it says health insurance is not provided.

So I was hoping you might be able to help us out a little bit. Representative Kopp. Thank you. Through the chair, Representative Bynum. So one of the things that happened when we got out of the defined benefit system in 2006 is the defined benefit system treated those incidents as part of the retirement plan.

So versus treating it as risk insurance, right? So totally, totally different approach under the DB system. Your healthcare and your disability were part of your retirement plan. Under the D.C. system, it is treated as an insurance policy approach. So it is not part of the retirement system and therefore it was not guaranteed.

Nothing was carried forward. Our own research on this, we had to go back into committee testimony back in 2005, is there was concern brought forward by legislators that, hey, we We don't have healthcare coverage for people who are hurt or for anything non-occupational. Like, we're not addressing that. And some of the comments were, we'll have to come back to that later. And they never came back to it later.

And then, so these concerns were expressed at the time in the 2005 debate on this issue because the healthcare plan is a cost driver. And we did not know how that would impact this bill. We tackled the lowest hanging fruit, which was the disability, because the trust is so well funded and there's few members that this would apply to. And the most immediate relief we could give them is this basically cash payment relief going from 40 to 75%. But again, it does not address the healthcare problem That was only taken care of in the DB tier, but under the defined contribution we are now, they would have to have some type of supplemental health insurance.

Possibly some employers would have that. You know, it would probably vary from local government to local government as to what they have, but it is not a defined contribution system provided health account. It would have to come from another method. Just increasing the disability to 75%, more people would be able to afford something. But even then, they're below the standard, or they're— if you take the average peace officer firefighter wage, they're still just above the Medicaid threshold, so they don't qualify for Medicaid either.

So they're kind of caught between the devil and the deep blue sea, so to speak, now with how do you get healthcare. So— Representative Bynum. Thank you. Chair Foster, through the Chair to Representative Kopp. One of the things that has been, I guess, something I pondered when I think about this bill is we are using the term disability and then we are also saying that it means that the individual is unable to continue in their specific line of work.

And is it true that when we— that that is different than saying that the person is not capable of continuing to carry on a practical job and/or other work that may not be related to duty-level work. For example, you may have an officer, for example, that is in a police-involved shooting and they're unable to continue being a police officer because of the psychological impact of being involved in a police officer-involved shooting, but they— so they can no longer be a street you know, be out there on the streets performing those duties or be an officer at all. But otherwise, they're a healthy person other than that issue. So maybe they go off and do some other career. They would qualify in this as being occupationally disabled, wouldn't they?

So the definition— through the chair, the definition of being occupational disabled is you are not able to return to to your job because you, you are not able to execute the skill set required or the capacities basically required to do that job. Now, another way that the Division would determine you to be off disability is if you took another job where you were being paid at least 75% of the salary you were being paid when you were appointed to disability. So if you found a job basically that paid you 3/4 of what you made, they would say, okay, So to your question, you're off the disability roll because it's— yeah, we know it's not the same thing, but you're making 3/4 of the salary, so you, you're off disability now. There's a follow-up. Follow-up.

Thank you, through the chair. So that's really kind of the importance of why we have this occupational, this vocational rehabilitation component, so that when somebody finds themselves in this position where they're unable to continue doing that job, they would be able to then enroll into a vocational— this vocational rehabilitation. Is that accurate? Yes. And then I had one final question, and I'll try to get out of the way if that's all right.

Representative Bynum. Thank you, Co-Chair Foster. The, um, this particular bill seems to be just a direct carve-out for peace officers and firefighters, but when we look across the tiered system systems. There are many, many jobs that are participants in our PERS system that are high-risk jobs. I can think of one off the top of my head.

Being a lineman is a very risky job. I would argue maybe more risky than being a peace officer or firefighter. Why aren't we including and/or expanding this to all of our employees that might be occupationally injured or unable to continue work? Representative Cobb. Yeah.

So, Mr. Bynum, yeah, I would never argue that a lineman's job is not dangerous, that's for sure. They may not have as many line-of-duty deaths, but it's a very dangerous job. So the question you asked is a fair one. Other members on this committee have asked that. And, you know, if you— and so the reason why I'm carrying this, because those groups of employees have brought this forward as a real challenge.

Their disability status at 40%. Most of them have young families and it's just kind of an intolerable position that they are in. It just seems like losing that percent of your salary, 60%, and losing your healthcare was devastating. So I'm bringing it forward because not only am I a public safety retiree, but those members brought it to me and said, hey, can we look at this as a fix? Are there— if we looked at a wider system fix, and I think that's really your question, if we look at the total number of people on disability from— if you look at all the DB people from our former plan who are on disability now and the DC people who are on disability now, it's a little over 50 people.

So that would include all the classes. So again, even if you put it to everybody, it's still a very small group because our disability rehabilitation programs work. Most people are recovering and getting off, and only a very few stay on long term. So I, I'm not an opponent of your concept, but I'm just— you just say, why am I carrying this bill? I kind of answered that question and also gave you an idea of how many people are on disability now.

It's a quick follow-up to that. Representative Bynum, thank you. Through the chair, Representative Did we include those specific numbers in— I didn't see them in the packet. So if they are available, could we get those provided to the committee? Yes, Chair Foster and Representative Bynum, it is in your packet, sir.

We will give you the memo again. And it came out of the House Labor and Commerce Committee. We summarized exactly how many DV members were on occupational disability. Disability and how many of those were peace officers and firefighters and then how many were on non-occupational disability and then we did the same thing for the DC plan. Of course, there is no non-occupational in the DC plan.

But there are 16 members currently in the defined contribution plan on occupational disability, 12 of whom are peace officers and firefighters. Thank you. I apologize. I just didn't see it. Oh, that's okay.

We got it put in front of us again today. I can email it directly to you again. If I can't find it, I'll reach out. Thank you. Representative Ballard.

Thank you. Through the co-chair, thank you for being here today, Representative Kopp. Did we discuss— didn't this include state troopers as well? We did. Yes, through the chair.

Yes, Representative Ballard. Okay. And then the other thing I just wanted to put on— I think when you came in last time, we had discussed us in regards to potentially backdating for 24 months. Do you know, do we have an effective date if this bill— say the bill gets passed and everybody's happy and it goes into effect, say, 1 June? Just pretend.

Sure. Yeah, through the chair, Representative Allard. So when the bill becomes effective, it would immediately apply to everybody in the system. It wouldn't apply just to future people being injured, right? So if you're in the system now, your disability payment would, if you were at least in your second year of disability, you would go to that 75%.

Now to your question, can we like say we're going to treat you as if this bill applied a year ago? That's a question for the committee, for the actuaries to see what would that cost. [Speaker:SENATOR_MCCARTHY] I get it and I'm looking at putting something through. I'm curious because I want, I'm trying to figure out, maybe you can help me through, the co-chair. Are there people, individuals that are going to miss this that are technically considered still disabled because this bill didn't pass in time?

Representative McCall, can we find those numbers by any chance? Even if it means like 1 or 2? Through the chair, Representative Ballard, anybody who is in the system on disability now will not be missed by this bill. It will immediately apply to them. And if they're in year 2 of their disability, because again, year 1, we're not changing the law.

It's just 40%. But if you're in year 2, it would go to 75%. All those people who would be already in their second year of disability would immediately be at that level. Okay. Because the bill— the entire bill's effect would apply to every single person who's on disability status.

Okay. And then— thank you very much. I appreciate that for clarification. I would also add that if any other occupation is added to this, that we already have the peace officers, police officers, troopers, and firefighters, I'm not going to support it. So I want to make sure this bill is clean for the firefighters and our peace officers so we can get it moving, no drama, and get it passed.

Okay. All right. Okay, uh, with that, um, looks like we have answered or asked our questions, and at this point my intent had been to, and it still is, to set an amendment deadline for next Thursday. But I want to caveat that by saying that I know we have a number of outstanding questions that have need to be answered. And I think what we'll do is before that Thursday meeting, we'll try to set up another hearing on this, even if it's a fairly quick meeting to answer those questions.

So we'll, we'll, we'll set the amendment deadline for next Thursday, April 23rd. March 3rd at 5 PM. And if folks can submit their amendments to Ms. Helen Phillips or my staff, Mr. Brody Anderson. And again, we'll try to organize a meeting prior to that to answer any questions that folks might still have. So with that, Representative Cobb, thank you very much for being here.

Thank you. And thanks. We're going to take a 1-minute at ease. I'm just going to grab some coffee and then we'll move on to the next, the next bill. Representative Ballard.

Yeah, I'm just kind of curious. Thank you, co-chair, for stopping really quick. How come we can't put this bill out right now? As in move it right now? I mean, why?

We haven't set— we hadn't set an amendment deadline. If folks do have amendments, but, you know, I am always certainly open to moving a bill if nobody has any amendments and folks are interested. First responders. I knew it's kind of important. I don't know if anyone has checked with Representative Stapp to see if he had anything.

I hate to, you know, Representative Tomaszewski. Thank you, Co-Chair. I do have an amendment for it. Okay, so in that case, and so we don't duplicate, I could just tell you I don't think the first year should be 40%. I think the first year should be the 75%.

Because I think the first year is when you really need—. It's more so. Yeah, so I, I have that amendment coming. Okay, real good. So I think we've got two things.

We've got at least one amendment, possibly more, and then also we've got some questions that need to be answered. So, but always happy to move a bill if the committee is, is interested. And, uh, and so with that, thank you very much, Representative, uh, Cobb. And, uh, we're going to take a real quick 60-second at ease.

Okay, I'm going to go ahead and call this meeting back to order. The time is currently 2:15 PM on Thursday, April 16th, 2026, and our next bill today is House Bill 77. That is the mail theft bill, and I would like to invite Representative Colon as well as her staff, Ms. Emily Durfee, to, uh, to the table. And if you could, uh, so the intent here is we'll take public testimony, uh, we have some fiscal notes, and then, um, we can either set an amendment deadline unless the committee has other thoughts. So with that, let's see here.

If we could just get a brief recap of the bill. Representative Colom. Yeah. Thank you, Co-Chair Foster. So good afternoon, Co-Chair Foster, Josephson, and Schraggi.

For the record, I'm Julie Colom, representative for Anchorage Hillside. Thank you for hearing HB 77 again. So as a brief overview, overview, House Bill 77 establishes mail theft as a state crime and classifies it as a theft in the second degree, a punishable offense closely aligned with federal punishments for the crime. The bill also provides statutory definitions for terms such as mail, authorized depository, mail receptacle, and explicitly includes mail mobbing through private mail delivery companies. In short, HB 77 gives Alaska another tool in the toolbox to help fight mail theft crime, an issue that has been increasingly prevalent in all of our communities.

And I'm happy to answer any questions. Okay, thank you very much. Actually, if we could maybe dispense with the public testimony and fiscal notes, and then we'll go to questions. Looks like we've got— [SPEAKING CHINESE] —one, two, a couple of folks here, maybe 4 or 5 people who are interested in public testimony. So I'm going to go ahead and open public testimony on House Bill 77.

And if folks would like to submit written testimony, they can do so by emailing us at [email protected]. And so first off, we have Ms. Tiffany Lofman, and then after that, Mr. James Stinson, and I believe Ms. Marge Stoneking.

So first we'll go to Ms. Tiffany Loughman, and if you could— looks like you're calling in from Anchorage. If you can state your name and your affiliation and proceed with your testimony.

Yes, I'm Tiffany Loughman, uh, T-I-F-F-A-N-I L-O-U-G-H-M-A-N, and I'm currently calling— I'm actually in Idaho on a family trip, but I am the detective that brought this bill to Representative Colon. So I'm just here in case you have any questions for me. Okay, thank you very much. Um, Representative Ballard. Yeah, hi Tiffany, thank you for being on the line today.

How are you?

I'm well, Ms. Ballard, how are you? Good. So, um, I wanted to ask you a couple questions because I do like this bill and I, I know there's been a lot of theft in Eagle River and Chugiak. Could you Can you talk a little bit about that? Because I know you're from my neck of the woods.

Ms. Luffman? Yes, yes. So we are seeing a huge uptick in mail theft in particular. And I think it's because bad guys, bad girls know that we really cannot do anything about it right now. It doesn't meet the threshold that the U.S. Attorney's Office is taking.

And so when patrol stumbles across somebody at 2 o'clock in the morning with literally a car full pool of mail and it's not opened and we don't have a, you know, an access device like a check or something with a number on it, you know, that we know, it's just like specifically closed mail, we can't do anything. Like what's the dollar amount of a piece of mail? So that's the frustration. It doesn't meet that theft statute. It doesn't meet the U.S. Attorney's Office standard for them taking it for prosecution.

So this is really, really a needed tool, um, to help us combat mail theft. Thank you. Okay, thank you. Um, Mr. Stinson, I think you're just available for questions as well. You're with OPA.

Um, just want to double-check.

Yeah, thank you, Chair Foster. For the record, this is James Stinson, Director of the Office of Public Advocacy. I'm just here to speak to the zero fiscal note today, and I believe Public Defender Haas is also on the line to do the same. Perfect, thank you. Okay, next up we've got Marge Stoneking and then Brian Ranger.

Uh, Ms. Stoneking, if you could put yourself on the record. Looks like you're calling in from Anchorage. Yes, I am. Thank you, Co-Chair Foster and members of the committee. For the record, my name is Marge I'm the State Director of Advocacy for AARP Alaska, and we represent more than 77,000 AARP members across the state, and we're in support of HB 77.

As was stated, mail theft is a serious and growing problem in Alaska, and it disproportionately affects and harms older Alaskans because seniors, many of them still rely on the mail to receive benefit checks, prescription medications, sensitive financial information, etc., and do less of their personal transactions online. And when mail is stolen, the result is often check fraud, identity theft, and long-lasting financial damage that can be extremely difficult to undo, not to mention the stress. Currently, Alaska doesn't have a clear state statute that specifically addresses mail theft. And HB 77 fills that gap by establishing mail theft under— as a felony under state law and giving local law enforcement the tools they need to investigate and prosecute these crimes. They are crimes.

This bill is about prevention and accountability, and by strengthening state-level accountability and therefore enforcement, HB 77 will help deter mail theft before it escalates into larger financial crimes that can devastate victims and strain public resources. Excuse me. AARP has long worked to protect older adults from fraud and financial exploitation, and we appreciate Representative Kahlum's recognition that seniors are often targeted and that this is something we can fix. For these reasons, we urge the committee to support HB 77 and move it forward. Thank you.

Okay, thank you very much. I don't see any questions, Ms. Stoneking, and I believe everyone else online is available for questions. Um, so with that, I am going to just double-check the room and make sure— is there anyone else who would like to testify? Seeing none, and I don't think there's anyone else online who would like to testify, so I'm going to go ahead and close public testimony on HB 77. And if folks would like to submit written testimony, they can do so by emailing us at [email protected].

We have a number of fiscal notes that I'd like to walk through here, and then we'll go to questions. So with that, the first person that we have on my list here is Ms. Nancy Mead, if you'd like to come up. And maybe if everyone can just read the fiscal note that they're reading from by citing the Cite the control code.

Welcome. Thank you. For the record, Nancy Mead, General Counsel for the Alaska Court System. I'm looking at fiscal note with a control code FMFVX for the Alaska Court System, OMB component number 768. The court system has a zero fiscal note.

This bill is likely to to mean that more cases are filed as Class C felonies in the court system, but the number of additional cases that we expect is not expected to be substantial, and the courts anticipate that they can adopt— absorb those additional cases without a fiscal impact, and therefore supplied this zero fiscal note. Great, thank you. While we've got Ms. Mead up, are there any questions? Okay, seeing none— oh, Representative Hannon. Thank you, uh, Co-Chair Foster.

Ms. Mead, um, by these crimes under HB 77 being prosecuted as Class C misdemeanors, what would be the typical punishment for that if convicted? Uh, through the chair to Representative Hannon, Section 1 would make this— theft of mail would add to the list of types of theft thefts of mail, it would be theft in the second degree, a Class C felony. The penalty for a Class C felony is 0 to 5 years. The first time is a presumptive of 0 to 2 years, but it could go above that. Representative Handon, follow-up.

Uh, thank you, Chair Foster. And I know that the court system wouldn't anticipate any additional costs, but I am seeing that we don't have a fiscal note from the Department of Corrections. Would you anticipate from the court's perspective that this will result in more people ending up in Department of Corrections custody? Through the chair to Representative Hannan, I think it's hard for me to predict how many more cases there would be. For example, some of these crimes are already crimes.

Theft of a credit card out of the mail could already be charged, or theft of my running shoes delivered by Amazon could already be in this category. It would likely be a misdemeanor if the value is less than $750. So, so some of the people that will be prosecuted or commit this offense would have already been in, charged with some crime. I think it would be beyond me to estimate how many new C felonies would be filed, and that's why I said it was a zero fiscal fiscal note, so I can't say. Thank you.

Okay, any further questions for Ms. Mead? Seeing none, thank you very much. Uh, next up, Mr. James Stinson, uh, if you could put yourself on the record and let us know which fiscal note you'll be walking us through as well as the control code.

Yes, thank you, Chair Foster. For the record, this is James Stinson, Director of the Office of Public Advocacy. Uh, the OMB component number is 43, and the control code appears to be TZMPB. I'm submitting a zero fiscal note for this bill. While there may be some increase in prosecutions, it's difficult to predict exactly how many, so that's the reason for the zero bill.

And Mr. Stinson, can you read the control code that you have there again?

The control code I have showing is TZMPB. MP capital B. And what date do you have?

Oh, that is the old fiscal note, although that is the one that is up on—.

That is the one that is up on the site. So my apologies on that. I don't have the new control code. Okay. The one that we have in our packets is B1.

I, J, X, R. Maybe I can come back to you after we go through the other fiscal notes, and if you're able to pull that up, it sounds like they're both zero fiscal notes, but I don't know if there's going to be much difference in the analysis and just want to make sure I've got everything accurate. So we'll come back to you here in a second. Um, let's next go over to Mr. Terrence Haas with the Public Defenders. Mr. Haas.

Yes, yes, thank you, Chair Foster. This is Terence Haas for the record, public defender testifying, or I'm speaking from Anchorage. I'm not going to have anything particularly new as to the other speakers. It's pretty much the same. It's hard to predict.

I don't anticipate a flood of mail theft prosecutions that would be beyond what we can handle with our current resources. That could be proven wrong. This is typically a federal crime, so this is a new a whole new type of criminal conduct under the state code. And so there's not a lot of objective information to look at. But I anticipate this being a zero note going forward.

And I probably have the old control number too. I'm looking at VDKGS, but that's a February 2025 code. That's the one published on the site. I know that the most recent one that I updated and sent in has no different analysis and has the same zero note. Okay.

And the control code on that one that we have dated March 20, 2026 is ZLRKE. But it looks like you've prepared both the old one and the new one. So if you're saying they haven't changed, then I think that'll suffice. But if there are any changes, please do let us know. We do have a question from Representative Galvin.

Thank you, Co-Chair. This is more, I guess, a confusion question. Maybe I'm not sure exactly who to address, if it's the public defenders or the Office of Public Advocacy, but I'm looking at page 2 of the presentation that was given to us, and we were shown the data of how serious this is and how many times this is happening. 74,000 Alaskans affected in the last 3 months. Just if we could let that sink in.

And, and then from the Capital One shopping research from 2026, 20— over 27,000 households are impacted statewide. Now when we were discussing a different bill, it was related to adding a judge. We learned about how impacted the public defenders were, how many cases they have. Per defender. And I just bring this up because I can understand us not being sure of how many cases that this would bring, but I guess I'm just a little confused when it's 0, 0, 0, 0, 0 all the way when it's 74,000 just in 3 months who have been affected with regard to— so this is a big problem, and I really appreciate this law coming forward.

And I'm just trying to make sure we're dealing with it appropriately. I don't know if the police officers need more help with enforcement, or do we need more help with a public awareness campaign, um, but I just want to make sure that we're being, um, as forthright as we can to understand and appreciate the implications fiscally. Um, and I, I just wanted to leave that there because I feel like I'm sensing something a little different than what I sensed from those offices in a different bill where they didn't know how many cases may be changing or any of that, and yet there was a need for more. So in this case, it feels like there's got to be some sort of a change with 74,000. Thank you.

Mr. Haas, do you have any comments?

All I would say is that I agree that there is certainly some objective data that there is a likely problem. With mail theft and that people are reporting that problem. It's extremely difficult to, to know from those numbers what the likelihood is of prosecutions, how frequently they will be, um, how much time they'll take up. And that's why it's an indeterminate note but still a zero at this point, because in circumstances where I— it's very hard for me to predict what the behavior of law enforcement officers and prosecutors is going to be. It's hard.

It's especially hard for me as the defense because we're responsive to know exactly how much time and effort that's gonna take up. Unlike, say, a new courtroom, because I can predict what courtrooms do. We have lots of operating courtrooms, and I have a sense of how busy they are and what each judge does and how those calendars work out. So I can pretty easily predict, I don't know if easily is the right word, I can pretty clearly predict that a new courtroom will create a certain amount of work. Much more difficult with a new provision that's never been enforced, uh, in the state system.

So I take the point, it could turn out that there will be a lot more work associated with this, and if that happens, I of course will have to be coming back and asking for the resources to do that. And I understand that's the intention of the bill, but right now it's hard for me to predict for sure what that will be. These are also not going to be highly complex charges. C felonies are something we're familiar with and know how to handle. I think that's part of my thinking about a zero note at this point.

Thank you. Okay, Representative Ballard. Thank you. Um, Sergeant Ranger, I have a couple of questions and I might have missed it. Could you tell me what's on the books right now as far as punishment for the criminals that, um, steal mail?

Mail theft. And Mr. Ranger, if you could put yourself on the record, your name and your title.

Yes, this is Brian Ranger. I'm calling from Anchorage. Just to clarify, I'm not representing any law enforcement agency. However, I do have 21 years of law enforcement experience. So, I'm going to testify just based off of that.

Can you, Ms. Allard, could you please repeat the question for me again? Yes, thank you. Through the chair, do you know what the, the, the law is right now as far as mail theft?

Yeah, I mean, there's no law currently, um, so the, the biggest issue that law enforcement has is if we were to, example, catch somebody going through your mailbox, mailbox tonight, and they, you know, maybe stole 10 pieces of mail, um, we would have to establish that one of those pieces of mail has a specific value or an access device. Okay. And we can't establish that without knowing what's inside there. We also don't have the authority to open up the mail to even establish that. So we kind of end up in this situation where our hands are kind of tied, even if we catch somebody right on the front end before they can, you know, commit credit card fraud or bank fraud or check fraud, where we can't even establish a misdemeanor crime potentially because we can't establish what the value of those letters are that that person just stole from a mailbox.

And so for law enforcement, it gives us another tool in our toolbox where we could actually catch some of these people on the front end before they have an opportunity to really victimize somebody. Or, you know, maybe they have stolen some mail and we catch them in a vehicle or something along those lines. We have a crime that we can actually charge them with. Follow-up. Follow-up.

So is it safe to say that the same individuals are potentially just doing crime after crime after crime because, one, they know how to do it, and two, they just get away with it?

Oh, absolutely. There's people driving around at 2 o'clock in the morning, you know, drive down the street and look in all the mailboxes that are unsecured, open them up and stealing mail or going through it and picking through what they think, you know, has checks in it or bank statements. And it's a very big problem. And then they don't just take the mail, they then go commit bank fraud or check fraud or credit card fraud or identity theft by applying for loans or credit cards and that kind of stuff. So yeah, it is a very large issue.

Co-chair, may I? Representative Ballard. Thank you. So I would say that it's safe to say I'm going to— story time. So when I was stationed overseas, and even when I was stationed here in the military, we had our installations were open, cars could come and go, no big deal.

And then stuff started kind of escalating out in the outside world. And we put police officers from the military, sometimes civilian police officers, and gate guard soldiers with guns. And it was a deterrent so that people weren't going to just bring things they weren't allowed to on installations. So I call you Sergeant Ranger because you used to be one, but Sergeant Ranger, may I, Chair, please? Absolutely.

So it's safe to say, I would venture in that not only would this be a deterrent, but once you bust some of those people that repeatedly do this all the time, word's going to get around that we can report them. And that might not necessarily mean there's a massive fiscal increase when a fiscal notes. I'm trying to get to the avenue that, well, basically that you say yes, there's so many people that do this and they do it as almost a gang thing that it's, it's not necessarily 27,000 individuals that are stealing individual mail from people's mailboxes, but it could be just certain groups that literally take 20,000 or 27,000+ thefts, and maybe they're responsible for 10,000 with this particular group. Is that— could that be an accurate statement?

Yes, I would say that's accurate. Um, there's usually a small portion of society that is responsible for a very large portion of the crime, and that would be especially true for the folks that are out stealing mail and actually know how to use that information information to commit fraud. And so, yes, we've certainly contacted folks where they literally have a vehicle full of mail or boxes or backpacks full of mail, and there could be dozens upon dozens of victims' mail in that person's possession, and we're still in the same situation where we have to establish a value or that there's an access device in that mail before we can actually charge them with anything.

So I, I thank you, Representative Colon, for bringing this forward because I believe that it's not 27,000 people that would be locked up in jail. I believe it's a group of gang, whatever mentality, mailbox theft people. And I don't think this is going to have a fiscal note that's going to impact to overwhelm our system. So great bill. Thank you.

I am so sorry, Mr. Ranger. I was going to call on you earlier under public testimony, but I was told you're not— you're just available for questions. But it sounds like maybe you were here for testimony. Is that correct? Public testimony?

Yes, that was my intention. Okay, I'm going to go ahead and open public testimony back up on HB 77 here. And Mr. Ranger, if you could just state your name and your affiliation again just for the public testimony and go ahead and give us your thoughts. Thanks for doing that.

Thank you, Chair Foster. Brian Ranger calling from Anchorage, Alaska as a private citizen in support of HB 77. Previously mentioned, I do have 21 years of law enforcement experience, the last 4 years of which are specifically dealing with theft and financial crimes and fraud. So I do have a good amount of experience to speak on. And I can say that mail theft does have a significant impact on Alaskans, especially the elderly and the vulnerable who do tend to rely on mail and the Postal Service for basically all of their essential mail, you know, bank statements, credit card statements, Social Security benefits, all that kind of stuff.

They are very reliant on receiving that in the mail, which makes them especially vulnerable to become victims when someone goes and is out stealing people's mail. And I can speak to the fact that, you know, most of these victims end up spending weeks, if not months, and maybe even years trying to undo the damage of what happens when they are a victim. And then the person who has taken their mail commits fraud and identity theft and bank fraud and, you know, you name the type of fraud. So having this bill go through would just give law enforcement another tool in their tool belt to actually catch the folks that are doing this, hopefully before they actually commit, you know, the bank fraud and the check fraud and the ID theft. If we catch them red-handed at 2 o'clock in the morning going through mailboxes or driving around in a car with, you know, 20 or 30 different people's mail in the car, we can actually charge them under this bill where currently, you know, we can't do that.

So I would just appreciate you guys consider this bill and move it forward and give law enforcement another tool to hold folks accountable. Thank you. Great, thank you very much. We do have a question. Representative Hannon.

Thank you, Co-Chair Foster. Mr. Ranger, since you did an investigation, one of the things that has occurred to me in the processing of this bill, and we keep talking about fraud, but Over the last decade, we've had a big push for people's pharmacy prescriptions to be delivered via the mail. And I am wondering, when you've been investigating things, if you've seen an uptick in people targeting prescription theft via mail theft. And again, especially elderly folks whose Medicare benefits requires them to use an online pharmacy.

With mail delivery. Mr. Ranger?

Yeah, I don't know that I would say I've seen a large increase in prescription, uh, particularly like prescription meds being stolen in the mail. It could be that, you know, maybe that's one of those items that are underreported. Frequently folks don't know that they're victims of mail theft until all of a sudden they're a victim of check fraud or bank fraud or identity theft or somebody shows up with a fraudulent power of attorney at their bank with their bank information and they're withdrawing thousands of dollars. So, it could be that there are victims out there, but they just don't know. They just, you know, think their prescription drugs got lost in the mail or something along those lines.

So, I can't say that I've seen a ton of those particularly, but I would imagine they're out there and they do occur. [Speaker:JULIE_PIRIANO] Thank you. Okay, with that, thank you very much, Mr. Ranger, and I'm going to go ahead and close public testimony on HB 77. And if folks would like to— folks would like to submit written testimony, they can do so by emailing us at [email protected]. So with that, we have, I think, 2 more fiscal notes and then we'll get clarification on a third.

And so next up I've got Ms. Casey Schroeder, Senior Assistant Attorney. If you could put yourself on the record and walk us through the fiscal note, maybe go ahead and cite the control code that you have.

Thank you, Mr. Chairman. For the record, Casey Schroeder, Senior Assistant Attorney General for the Criminal Division at the Department of Law. Before the committee is a fiscal note on House Bill 77 from the Department of Law Criminal Division, the criminal justice litigation allocation, OMB component number 2202. The control code is TRTYJ, and it is a zero fiscal note. And similar to the Public Defender and Office of Public Advocacy, while we do expect some increase in cases, it's difficult for us to determine how many we get.

And so at this time we believe that the division can absorb that within its existing budget. Okay, thank you. Representative Josephson. Mr. Chairman, would you— if I have some policy questions, is this the time to do it, or would you like to— just a couple quick questions for Ms. Schroeder. Ms. Schroeder, perfect.

Yes, Representative Josephson. Ms. Schroeder, the court system attorney, Ms. Mead, had a hypothetical that that made me think about a circumstance. She noted an expensive pair of shoes, for example, would be less than $750. That would be an A misdemeanor today, possibly even perhaps a B misdemeanor.

If it— if they were stolen out of a car, that's how it would be charged. If they were stolen out of a mailbox or a door stoop, as the case may be, you would need to seek an indictment under this new crime. And then would you also have an information, I think they're called, or a second count reflecting the A misdemeanor as an option for charging? Is that how you would do that? Ms. Schroeder, through the chair to Co-Chair Josephson, that's correct.

You would likely see both charges. Right. Follow-up. Follow-up. And I know you're not a defense attorney, But, but a possible settlement would be on that A misdemeanor to save everyone the trouble of trial and all of that time.

If the evidence was solid, an OPA or PD employee would be fortunate to get the A misdemeanor. Is that typically how that might resolve? Ms. Schroeder. Through the Chair to Co-Chair Josephson, that may be one resolution. As you know, there are many different ways to resolve a case.

But that might be one resolution. Yes, follow-up. So in the current law, there's a gradation that's used in 1146.130, theft in the second, where if you're stealing something, for example, out of a store, you could do it several times to get to the felony threshold. And I understand there's a policy call here that mail is more personal than an item out of a hardware store, which would bother the hardware store management but isn't a threat to an individual's Social Security number and banking information. I get that.

It's not subtle. But I guess my question is, in a circumstance where the evidence— and I understand this is highly unlikely, that it's likely a much more ambitious mail theft is afoot. But in a circumstance where the mail that was discovered, which would typically be— you could only use as evidence what you found— um, it was just de minimis because it was an REI catalog. Um, the defense could use a mitigator, uh, I think it's D9, the least serious conduct within that category. Um, —And in that circumstances, with that 0 to 2 presumptive term that Ms. Mead talked about, might that drop down with no other serious bad acts to a 0 days with— you might be on paper with a probation officer, etc., but it's possible that the punishment, although you have a barrier crime now, could be fairly de minimis.

Is that possible? Ms. Schroeder. Through the chair to Co-Chair Josephson, because the presumptive term is 0 to 2, the defense would not actually need to prove mitigator, but they could argue that it was the least serious within the class of offense, if it's, for example, an REI magazine, and then use that argument. They could say it's akin to a least serious, and use that argument, yes, to ask for a lower sentence, and it could go down to 0. That's correct.

Okay. Thank you. Representative Bynum. Thank you, Co-Chair Foster. Through the chair, just as kind of a quick follow-up to his scenarios that he gave, his first scenario that he gave was— Mr. Schroeder was specifically about stealing the shoes out of the car versus stealing them out of your mailbox, and that there was an added crime for stealing them out of your mailbox.

But in the first scenario, if I broke through your car window and stole the cars, couldn't you also catch a— catch, catch that as part of the additional crime for creating the vandalism to the vehicle? Ms. Schroeder, through the chair, to Representative Bynum, that's correct. You may see an additional charge of criminal mischief, for example. In any of these hypotheticals, it's always possible that additional charges, depending on the conduct, would, would be in the case with the mail theft.

Thank you. Okay, do we have any further questions for Ms. Schroeder? Seeing none, thank you very much. Okay, we have one more fiscal note, and that is Ms. Diana Thornton. If you could put yourself on the record and walk us through the fiscal notes.

Hello, yeah, this is Diana Thornton with the Department of Public Safety, Administrative Services Director. Uh, we have a fiscal note for the Alaska State Troopers, uh, appropriations OMB component 2325 and control code HL IQN.

And the department is submitting a zero fiscal note recognizing that the department already is responsible for enforcement of laws and investigations and does not require new enforcement requirements beyond those that are existing. So any volumes expected to be absorbed into current resources. Okay, do we have any questions of the committee? Seeing none, thank you very much, Ms. Thornton. Mr. Stinson, just rounding back to you, you're with the Office of Public Advocacy.

You had read an older version of a fiscal note, just checking to see if you had an opportunity to to see if there were any changes from the old one to the new one. You may be the same person who prepared both of them, and so if you could just maybe update us on that.

Yeah, thank you, Chair Foster. For the record, this is James Stinson, Director of the Office of Public Advocacy. I did find the correct fiscal note. I think control code BIJXR It's identical to the previous one. The language says it's indeterminate, but the submission itself is a zero fiscal note.

Okay, thank you so very much. Do we have any further questions for the sponsor or anyone online regarding the bill? Representative Bynum. Thank you, Co-Chair Foster, Representative Klobuchar, through the chair, thank you very much for bringing this forward. I know it's a big issue and it's been something that's been talked about for a long time, and I know it hasn't been easy to get to this point.

So just thank you very much, appreciate it. Representative Moore. Thank you, Co-Chair Foster, and same sentiments as Representative Bynum. Thank you so much for bringing this forward, Representative Colon, and has my full support. So I appreciate you.

Representative Ballard. Yeah, thank you, um, Co-Chair Foster. So I'm concerned because We're— I'm going to go here. We're running out of time in this session, and I know that this actually impacts all of us. I mean, 1 in 10, and I think it's going to send a sharp message to the criminals.

They can't get away with it anymore. I don't want to see another moment go by with it. I know that we're supposed to have amendment deadlines and everything, and if you do set one, possibly not, but if you do decide to do that today, is it possible possible we can do it quickly enough so that we can vote on this and get this out. I mean, if it was up to me, I want to move it out today.

I— let's see. On that note, I have received a few notes from folks in the committee that were interested in doing that. But maybe let's go to Representative Tomaszewski first, see what your comments are, and then we'll address that. Thank you, Co-Chair Foster. Yeah.

I look forward to just moving this out. This is a huge problem in my district and I think probably a lot of our districts. And so I thank Representative Klom for bringing this forward. I see we have already 16 co-sponsors on this bill and I would be happy to make the motion if it's the will of the committee to do that.

I have received one note from one member who is interested in doing an amendment. I don't know if there are further folks who are interested. No, that's okay. Go ahead. Yeah, I just wanted to put that on the record first, and we can certainly go to at ease, but just want to let you know.

So then the question is, how soon do we do it? So with that, we'll take a brief at ease.

Okay, House Finance back on record at 2:56 PM and So the original plan was to set an amendment deadline for Tuesday evening at 5 PM. We'll go ahead and move that up to Monday at noon. So that would be Monday, April 20th at noon. If folks have amendments, if you could please submit those to Ms. Helen Phillips or my staff, Mr. Brody Anderson. So with that, Representative Ballard.

Thank you, and I appreciate you moving the time up. I just want to make sure on record that we've been waiting for a second hearing on this bill for a year and a half. So I'm super excited that you moved the date up by one day because that still makes a difference. And I appreciate members of the committee working with everybody to make this bill go forward. Thanks.

Great. Thank you. Okay. Representative Blom, do you have any— or Representative Hannon? I feel like since Chair Foster, since Representative Allard said she wanted to put on the record be clear, I feel the need to correct the record because we haven't been waiting for a year and a half for a second hearing.

It was heard— my notes say March 26th. The sponsor could correct me, but that was not a year and a half ago. I apologize. Last session, my fault. No, no, I apologize.

3 Weeks ago. Representative Colon. Thank you, Co-Chair Foster. So the bill was first heard in a committee a year and a half —go. I apologize.

Okay. Yeah, yeah, finance has been great. Yeah. Okay. Sorry, not in committee.

Yeah, I apologize. I meant in sessions. So first hearing here was March 18th, from what I see, of 2026. Yeah. Okay.

Um, so with that, um, appreciate— do you have any comments, Representative Klobuchar? No, I just appreciate the committee hearing the bill and all the great questions. Thank you so much for your time. Great. Thank you.

Okay, so thank you, and we're going to jump right into the next bill. We do have a hard up in about half an hour. So we do have one more bill that we wanted to take up, and it's just the CS for the next bill, and that is House Bill 193. That's the unemployment benefits and paid parental leave bill, and we want to introduce a CS. And so Representative Kutscher-Schragg, if I could get a motion for the CS, that'll put the new CS on the table and then we can get an explanation from Representative Hall's staff, Ms. Joan Wilkerson.

So with that, Representative Froegge. [Speaker:FROEGGE] Chair Foster, I move that the House Finance Committee adopt committee substitute for House Bill 193, work order 34-LS0612/L dated 4/13/26 as our working document. [Speaker:CHAIR] Okay, and I'll object for purposes of discussion and and an explanation. Ms. Wilkerson, if you could please come up and put yourself on the record and walk us through the new CS and highlight the changes. And just so folks know, as we move into questions, we do have a number of people available for questions, and that is Ms. Paloma Harbour with Division of Employment Training Services, Lennon Weller, Research and Analysis Legislative Liaison for Department of Labor, and finally Allison Radford, Ledge Legal.

So with that, Ms. Wilkerson. Thank you, Co-Chairs Foster-Josephson and Schraggy, and members of the committee. For the record, my name is Joan Wilkerson, and I'm staff to Representative Hall, sponsor of HB 193. I'm here to introduce and try to explain HB 193, Working Version L. And, um, Representative Hall and I were last here before this committee last month when we explained that HB 193 is intended to do two things: to update Alaska's unemployment insurance benefit program and also to create a paid parental leave program. The Department of Labor and Workforce development staff have come to us with concerns about potential issues with the bill arising out of the Federal Unemployment Tax Act and other federal laws.

With their expert advice and close collaboration with Ledge Legal, we've restructured the bill to remove the parts that could be interpreted as conflicting with federal law. These changes are technical versus policy-based, and I will go through them in a— just a moment, but I wanted to explain one thing that I learned through this this process, and that was the Federal Unemployment Tax Act, referred to as FUTA.

It's a federal act that employers in every state pay FUTA taxes, 6% on the first $7,000 of each employee's wages, but they also receive 5.4% 4% FUTA credit for contributions to a FUTA-compliant state UI program, resulting in an effective FUTA tax rate of 0.6%, so a maximum of $42 per employee. Alaska receives a UI administrative grant funded through a portion of FUTA tax revenue, which covers the cost of state administration of their UI programs. This funding requires Alaska to maintain FUTA-compliant UI systems, which is why these changes are so necessary and have the gravitas that resulted in the need to request a CS. So I provide an explanation of changes. HB 193 has been amended to address those technical concerns and about the need to make implementation of the paid parental leave program conditional based on the federal government's acceptance of the concurrent changes in the state's employment insurance statutes.

So as I go through this, I'll refer to sections that will only be invoked if the federal government either grants or denies acceptance of this bill. And so parts of that are confusing if you simply try to read the bill, which is why we're here. It also references federal unemployment insurance and related tax laws, incorporates sections on reimbursable employers, which I will get to in a minute, and establishes how employee contributions are withdrawn and accounted for. The amendments ensure compliance with key federal laws.

Title page 1, line 1 eliminates the phrase "special employer contributions." Come to find out That has a special meaning in FUTA, which is not the intended meaning that was intended in our bill, and it can cause problems with the federal government. So we replaced it with employer surcharges to avoid that confusion. Title page 1, lines 4, 5, adds relating to employee unemployment tax credits and relating to employee Employer Contributions to Employment to the bill's title.

Title Section 1, page 2, line 2 removes Alaska Statute 2322.90(g), which is in the previous version H. [Speaker:CHAIR] Gotcha.

Representative Bynum. [Speaker:BYNUM] Thank you, Co-Chair Foster. I just want to clarify. So we have 3 documents in front of us. In front of us.

The first document is the explanation of changes from version H to version L, and that, you know, that is what I believe we are kind of going through now. We have a redlined version of the bill, and then we have the actual version of the bill. Is the guide that we are walking through, is that reference to the bill, not to the redline? Is that correct?

Section 1, page 2, lines 14 through 17, removes reference to employee contributions to the unemployment insurance program, and it adds a new section for paid parental leave, Alaska Statute 23-10-710B, which extends paid parental leave benefits to the employees of government entities, nonprofit organizations, and and federally recognized tribes. These are referred to as reimbursable employers and under current unemployment insurance laws. And these employers do not pay into unemployment insurance, but instead when they have employees who need unemployment insurance, they reimburse the unemployment insurance fund for that amount, for those benefits received. So the employees would not be eligible to receive paid parental leave if we hadn't added this into our bill. It did not exist in version H, so we added it into version L in order to avoid leaving them out because There's, I think, 22 employers with a sizable number of employees that are reimbursable employers.

Section 1, page 3, line 28 through 31, language is redrafted to clarify the intent that eligibility earning threshold is the same as that used for unemployment insurance described in AS 2350. Much of the changes and much of Version L are intended to streamline things such as earning threshold to make them similar to the UI system for ease of use and for ease of administration by unemployment.

Page 2, page— Section 2, page 10 removes previous version of the section as no longer conforming based on other redrafting in this version. Makes conforming changes to 2310.710 conditioned upon approval from the U.S. Department of Labor and AS 2322.90, employee contributions to unemployment insurance. Section 3, page 11. Alaska Statute 23-710, new sections D and E, move the employer-paid parental leave surcharge and credit from the unemployment program, um, to the paid parental leave chapter of the statute. It creates a new chapter in Alaska statutes and removes the program created in version H from the UI program.

This was required by federal tax law.

So Section 2322.95 from Virgin H is removed from this draft because it did not conform to federal requirements. Section 4, page 11, this will provide an employee tax credit to offset their paid parental leave contribution similar to the credit process in statute used in both STEP and TVAP. Section 5, page 11, conforming changes conditioned on approval by the U.S. Department of Labor of this bill's repeal of Alaska Statute 2322.90(d). Section 6, page 11, moves the employer surcharge for the State Training and Employment Program, STEP, from CSHB 193H, to instead placing it in Alaska Statute 15630. Language conforms with direction from DOLWD to ensure compliance with federal requirements.

Gives calculation direction to the Department of Labor to accommodate the employer contribution to paid parental leave in Section 3 if the U.S. Department of Labor approves. It so that it can be implemented. The UI rate reduction from CSHB 193H removed due to non-compliance with federal requirements as conditional effective date. Almost there. 6.7, Section 7, page 12, conforming changes conditioned on approval.

There's over and over I make reference to the conforming changes needed and based on the approval of the US Department of Labor. So I'll try not to repeat every single one of them. Section 9 removes the minimum contribution rate of 1% for employers with more than 1 year experience and clarifies that the employer tax rate cannot go below zero. This sets the ceiling and lowers the floor to zero. Includes conforming language to reflect there will not be employee contributions to the UI fund.

This does not increase the employer's contribution rate, but only makes a conforming change. Section 15 repeals the employee UI contribution and conforming tax credits for STEP and TVEP as a conditional effective date. Section 19 adds conditional language applicable to all sections of the bill that require approval of the U.S. Department of Labor before taking effect. And, uh, Section 21 provides that AS 2310.710(f) of this bill goes into effect only if the U.S. Department of Labor does not approve the repeal of Alaska Statute 2310.290(d) in Section 15 of the act. This is a conforming change to ensure all parts of the bill that do not require U.S. DOL approval may go into effect and be functional should the U.S. DOL approval not occur.

Great, thank you very much. I would like to recognize that we do have with us Representative Jimmy. Also like to recognize that we have in the audience with us Representative Aishai. Thanks for being here. Before I go to questions, I just want to— I know that there's a lot of technical items there, but if you could, I think at the very start you had mentioned that essentially the purpose of the CS was to try to conform to some federal issues, and if you could just maybe bring us back to kind of the main intent of the CS, and then I think that will kind of help to get us on the same page.

Ms. Wilkerson? Certainly.

The changes are— I refer to them as technical, and they are. They are totally based on making sure that we don't interfere with or be interpreted as being non-compliant with the Federal Unemployment Tax Act and other federal tax and benefit-related legislation. So that is the entire purpose of this CS. It is not intended to make policy changes. It's intended just to just make it legally compliant with federal law.

And for more in-depth discussions on the federal law and how it impacts Alaska's UI system and other benefits, Director Paloma Harbour is here, as you mentioned, and we have Allison Radford from Legislative Legal Online, who was the author of the CSN of the bill. Great. Okay, that is perfect. Thank you very much. So with that, as you mentioned, we do have a number of folks, the experts here in the room.

And so we have a couple of questions. We've got them from Representative Galvin, Bynum, and Josephson so far. So with that, Representative Galvin. Great. Thank you.

Thanks for bringing this forward. That seems like a lot of work. I appreciate that. I'm referring back to the presentation that was given to us. It's pretty direct presentation and it seemed to be easy to track.

This CS feels a little harder to track and I think it's because of all of the technical things. So I'm just trying to bring it down back to the basics here. On slide 14, it had a— a series, a set of policy recommendations, and I think that my understanding was that there would be these changes, or perhaps these were policy recommendations for us to consider. I'm not sure. But one of the pieces is the effective date, and that one is— I know is in here because I could find that and track it and understand the language that you were sharing.

But the other pieces in here are a little harder to know whether or not they are incorporated. And so I am wanting to track that. So it is— one is for polishing the snapback language to ensure that the UI fund stays solvent. Apparently those funds go into the UI first, my understanding. Exempt PPL from the sweep, ensure the last counting benefit is another one that the way I understood it, I put in my own little notes.

So I won't go through them all, but if you could help me understand what of this is incorporated in these 3 pages of changes. Ms. Wilkerson.

Through the co-chair, Representative Galvin.

[Speaker:DR. BETHANY BRAY] We— the changes that I've just described are purely technical. What was considered potential policy changes are in the list that you have described.

And they, for example, the snapback language, the effective date, Obviously an effective date where you're trying to build up a fund because you have a brand new paid parental leave program and you're gathering money into it, and an effective date for paying out the benefits, it would make sense to put that a couple years in the future and not January 1st, 2027. Mm-hmm. That's true. Our focus was entirely on technical changes in this particular CS. Follow-up, if I may?

Representative Gelman. Thank you. So I know that you're maybe not comfortable speaking for the representative, but if you are, if you could share of this list of recommendations that we might consider related to policy, is there a general comfort level of us perhaps considering that as amendments or considering pieces of this for amendments? Surely January 1st, 2029 would be something I can appreciate you've alluded to already would be important so that there would be funds accumulating. But is there anything in here that is not okay with the sponsor?

Ms. Wilkerson. Through the co-chair, Representative Galvin, asking what's not okay is more difficult, and I would need to check with Representative Hall to give you a not okay. But of the items listed on the slide that you referenced, there has been repeated discussion of things that, like reducing the benefit. The original bill says 8 to 26 weeks. It still says that.

And it could be that as a policy decision that a different length of time is, would be more viable. Other issues that may be addressed is there's been reference to concerns for small businesses.

That would lend itself to a consideration through an amendment, I would think. Thank you. Okay, next up I've got Representative Bynum and then Josephson. Representative Bynum. Thank you, Co-Chair Foster.

Just really quick, Co-Chair, you know, I had from my notes when we had this last time about 8 notes— I'm sorry, 8 questions of things to kind of get to the bottom of with this particular bill. I know today, given time, we're definitely not going to be able to get to that. I need to be able to kind of take in what we've done with this change. But just in simple terms, through the chair, What I'm seeing here, what it appears to me is, is that the previous version of the bill looked like we were doing all of these mechanisms through the UI. And what it appears now is that we're basically mimicking the same thing, but we're pulling out this— the paid parental leave portion of it out of that program completely and creating basically a parallel program that mimics what you were doing before.

Is that a fair characterization of what this change just did or will be doing when it's accepted? Ms. Wilkerson, through the co-chair, Representative Bynum, that's a good description. And because that was the instructions that we've been given in order to maintain compliance with federal UI law, it is— so happens that Alaska already has a program that does that, and that's the STEP program and the TVET programs. They do the same thing.

They are separate from UI, but they rely on employee-employer contributions and they provide a benefit. Representative Bynum. Thank you, Co-Chair Foster. Through the Chair, the previously— or in the prior version of the bill and I didn't see that it technically changes here that I could find in the quick run-through. There was a change in the cap that we— the maximum amount that the tax applied to.

That doesn't change in this CS, does it? How it's applied. Ms. Wilkerson. Through the co-chair, Representative Bynum.

—Just in case. I don't want to speak without being 100% sure of my answer, and so I would defer to Director Harber or Allison Radford on that, because I don't want to misspeak. Sure. And Co-chair, just for clarification, what I'm specifically referencing is the UI maximum maximum qualifying wage base. I know that we had had a change on some of the terminology for that last time.

I was wondering if this, what we are doing in the CS, impacts that maximum qualifying wage base. Through the co-chair— Ms. Wilkerson. Thank you. Through the co-chair, Representative Bynum, I misunderstood your question. My brain went to the very long list of salaries that It takes up about 12 pages.

That's what I thought you were talking about. No, it is— was not. I don't believe we did change the maximum qualifying benefit. Thank you. Okay.

Okay. Next question we've got is to Representative Josephson and then Allard. Representative Josephson. Thank you. Through the chair, Ms. Wilkerson, appreciate your presentation.

I understand that that the CS is designed to meet the federal requirements so that we can move forward, I think, with some of the other state decision points. I guess where I am is I understand that we have a trust fund that is more solvent than any trust fund needs to be, essentially. It certainly That hasn't always been true in the 14 years I've been here, but it's mighty true now. And so we're wondering why we have some of the lowest payment schedules in the country. And I know that's one goal.

And the other is, of course, the paid parental leave. And one of the things, Mr. Chairman, that would help me— and I thought I had a note on it, and now I don't know where I wrote that— but what would help me is is where is the decision point on, as Representative Galvin said, your slides 13 and 14 in particular from last week or a couple weeks ago, so that I knew— and this is where maybe the unemployment folks would come in, and it may almost require a PowerPoint slide to be able to gauge. For example, you noted that stakeholders thought that there was concern that the payments might have to be reduced from the more ambitious $817 a week to $525 a week. And I sort of need to see that on a screen so I can see the crossover points and that sort of thing. So I'm certainly a supporter of where Representative Hall is going.

It's just those sorts of analyses that I need to have a better grasp of right now. Okay. Any comments, Ms. Wilkerson? Through the co-chair, Representative Josephson, we would be happy to provide additional information like you are requesting.

Okay. Thank you. Okay. I have got Representative Ballard.

Thank you. Through the co-chair Foster, so Ms. Wilkerson, I am I am concerned about the small businesses. I've had a lot of small businesses in Eagle River reach out. I know that some small businesses are considered, like with manufacturing and mining and stuff, 500 persons. And then there's the other level of small businesses, 50 and under, and then they go to 20, and then they go down to like 5.

Um, did we define the definition of small businesses in this bill? I was trying to look through it, but there's a lot of pages today. I appreciate you bringing it back. Okay. Ms. Wilkerson.

Through the co-chair, Representative Allard, we did not define that in the CS. Okay. There's— we've done a lot of research on the issue and we're aware of the stakeholder issues and concerns. There's— there are different programs that have different numbers of minimum numbers of employees and for example, family medical leave, I think it's 50 employees and other programs it's 25. And we didn't come up with a number to provide in this CS because we were so focused on technical issues and not policy issues.

Thank you. May I do a follow-up, please? Representative Allard. So if I'm not mistaken, the chamber— I think it's Alaska Chamber— said this could be detrimental to small businesses. Did you guys read that memo?

Ms. Wilkerson. Through the co-chair, Representative Allard, I'm sorry, I'm not familiar with the memo. All right. A'pai. Thank you.

Okay. Looks like we're about at the end of our time. I don't see any further questions right now. Representative Galvin? Yes.

Thank you, Representative Foster, co-chair. I just wanted to say thank you for this idea. I think it's really important. I do appreciate that you have— that there may be some space for us to weigh in with regard to policy and I look forward to working with your office on that. I think that these are— this is a really good start and this gives us good guidance as well.

I wondered if you have already done some research with regard to some of these policy possibilities and you can feel fine getting back with me me offline on that, but I know, for example, there were some back and forth with regard to— I think it was an initiative where small businesses felt that they were overly impacted with regard to a healthcare set-aside that I think it was a People's Initiative, and then I think there's been some back and forth about what is a small business, for example. I think they landed at either 25 or 50, but that's the sort of thing I would like to help work with the office, because again, I think that for the state of Alaska to be able to stand up a family leave program, it says quite a few things. One, young families, we want you to stay here. Two, we're going to help you keep your employment while engaging with your young child because we know how important that time period is for children. So I just, again, I'm willing to stay at this table and keep working, but I will do some research in advance and I welcome you to share with me whatever you have already with regard to some of these policy recommendations because I think we're all ready to dig in and support this.

This is a really exciting thing for Alaska to be able to have on board. Thank you. Okay. Thank you, Representative Galvin. And so with that, just announcing our schedule moving forward here, we were supposed to have a 9 a.m. meeting.

However, there were no bills scheduled, so we will not have a 9 a.m. meeting tomorrow morning. There is no floor session tomorrow, and so the 1:30 meeting that we had scheduled for tomorrow will be canceled. So— and we are setting this bill aside, just to be clear. Chair Foster, did you remove your objection? I believe there is a motion.

Thank you. I have that written down on my little paper here, and I have so many little writings. Ripsan Ballard. Thank you. And Mrs. Wilkerson, I might need to apologize.

It might have been something else with paid parental leave. I think it was ballot measure 1. So I might have confused the two. But there is something on my desk about something about parental leave. So just wanted to put that on the record.

Thank you. Thanks. So just to go back to the removal of my objection, this would be for the adoption of the CS. I am going to remove my objection for the adoption. Are there any other further objections?

And this is for the work order 34-LS0612/L. Again, just the adoption of the CS. I don't hear any further objections, so that is our working draft. And again, for the schedule going forward, we did not have any bills scheduled for tomorrow morning at the 9:00 a.m. meeting, so we will not have that meeting. There is no floor session tomorrow, so the 1:30 meeting scheduled for House Finance, that will also not be held.

So that 1:30 meeting for House Finance is canceled, and we will likely be back Monday, Monday at 1:30 p.m., so no morning meeting, but we will have the schedule distributed and released later today for official being formally announcing that. So with that, if there is nothing else to come for the committee, House Finance will be adjourned at 3:28 PM. Thank you.