HFIN-260507-1330

Okay, I'll call this meeting of the House Finance Committee to order. Let the record reflect that the time is currently 1:39 PM on Thursday, May 7th, 2026. And present, we've got Representative Tomaszewski, uh, Representative Co-Chair Josephson, Representative Galvin, and myself, Chair Foster, and we've also got Representative Jimmy. And before we start, just a reminder, folks can mute their cell phones. We do have two bills up today.

We also have, I believe, oh, Representative Hannon and Representative Bueno. And, uh, so we'll be taking up amendments for both of the bills that we have up before us today. We also have Representative Stepp, and the two bills that are up before us today are House Bill 388, that is the bulk fuel loan cap bill, and we also have with us Representative Cochran. And the second bill that we have up and we'll be taking amendments is House Bill 193. That is the Paid Parental Leave Bill.

And, um, let's see here.

So, so I think first what we're going to do is just maybe give it another moment here, and we'll let some more folks stream in here before we go to the amendments, which I believe there was— well, there is, there's one amendment for sure. But we'll, we'll take a brief at ease and we'll see if we can locate— looks like we just need 2 more people. So with that, we'll take brief at ease.

Okay, House Finance back on record at 1:42 PM. And so as I mentioned earlier, the first bill before us is House Bill 388. That is the bulk fuel loan cap bill. And we do have one amendment. And so, Representative Bynum, if you would like to—.

Thank you, Co-Chair Foster. I move Amendment 1. Okay. And I'll object. Mr. Nelson.

Thank you, Co-chair Foster. What the intention of Amendment 1 was supposed to do was it was intended to create basically a loan to the bulk fuel program in the event that the fund were to run to a zero balance. And the intention was supposed to be that it would reach out, it would be able to borrow funding from the Power Cost Equalization Fund. It would then be utilized for the purpose of the bulk loan fuel, and then as payments came back in, the intention was that it would pay back the Power Cost Equalization, including any lost interest that the fund is going to— would have otherwise earned, so that the fund becomes whole. And it was also supposed to— intended to put a cap on that, but there was timing problems with review and getting it back to legal, and we were not able to do all of that.

But the reason why we brought it forward was because of the concern of undercapitalizing the fund, and we wanted to make sure that there was a mechanism potentially in place to do that so that loans could still go out. The reason that we were looking— and I was talking with with Ledge Finance, and we identified power cost equalization because it is a large fund that we would be able to borrow from and pay back without constraints of the fiscal year concern. Otherwise, we would just reach into the general fund and borrow money from that, but there's legal issues with trying to— legal issues with trying to do that in a fiscal year, from fiscal year to fiscal year. Fiscal year. So the amendment is not ready.

My intention is to withdraw the amendment, and that if we decide that under capitalized fund or needing a loan mechanism to make sure the funding has funding, we can do that outside of this committee, potentially on the floor, or working with the other body, if it's deemed by us that it's important to have that relief valve. So I didn't know if Representative Sharkey wanted to make a comment at all on it, and then I'll withdraw when we're done commenting on it, if that's okay. Representative Sharkey. Yeah, thank you, Coach Foster. In our consultations with the Legislative Finance Division, we came to the same conclusion that Representative Bynum came to, that this is the best approach for managing any insufficient balance in that fund to be able to fulfill these loans and make sure that communities have access to the funds necessary It's unfortunate we don't have it ready to go fully today because I think this would be the best course of action.

I don't generally like to just leave it to the other body to resolve these issues for us.

I know that in a moment we'll have— I think the intent of the committee is to move this bill I don't know if there's any interest in delaying that slightly so that we can get this corrected and address this on our end. I think that would likely be my preferred approach, but I guess I leave that somewhat to the committee to decide. Thank you, Co-Chair Foster. Was there— Representative Hannan? Thank you, Co-Chair Foster.

And I guess this is a process question about how the fund is currently capitalized. And my question is, is it capitalized in the capital budget? Um, and I assume that we've only capitalized it at the standard amount that it is annually right now. So would it be a capital budget amendment to expand it? Because right now the bill changing the amount there's not a fiscal note, right?

Because that's the operational cost of the program. But however much—. Representative Bynum. Thank you. And Representative Schrag, Co-Chair Schrag could correct me if I'm wrong.

My understanding is, is that there's a certain amount of funding available in the fund now, and that will go down to zero, potentially zero, as they give loans out and then get recapitalized from repayment. And potentially could grow based on interest incurred from those loans. But if we need to put more money into it, that would be a direct UGF transfer into that fund. And we could do that through any appropriation— any appropriating measure that we wanted. We could do it through the capital budget.

We could do it through the operating budget. But ultimately, we are locking up UGF dollars to capitalize this fund. And I think that's one of the big concerns that we have been talking about. —When you looked at that previous fiscal note, you could potentially be tying up $90 million to be able to make sure that the loan is fully available. That's my understanding of it, and Representative Sharkey might have additional information.

Representative Sharkey. Yeah, thank you, Co-Chair Foster. Representative Bynum is, I believe, correct. I think the question is largely, do you believe this is a permanent problem or do you believe this is a temporary problem? If you believe this is a permanent problem, you want to you would want to capitalize the fund at a higher level so that it has a permanent capitalization from which to draw from and continue to sustain this program.

If you believe it is a temporary problem, it would be best to have a temporary solution, which is what this amendment provides, which is for basically for them to draw from the PCE fund temporarily to meet the shortfall that we have projected this year. And then as payments come back in, you repay that draw and you expect not to need those additional funds in future years. I have some other comments, but I'm going to stop there for now. Representative Stepp? Sorry, I don't think we're done.

Representative Hannan? I asked a question about capitalization of it. On the one hand, Mr. Chairman, I believe it is a permanent problem. We are going to move statutorily how much somebody could borrow. Now, whether the demands —remain permanent, is subject to change, but increasing to $1.5 million as the maximum borrowing.

But we see through the fiscal analysis, very few communities have done that. And if the price of fuel does drop in the future, we've also heard— my recollection is that the highest applicant time is in the spring. So in theory, if we, through a capital budget amendment, put another $15 million into the fund, we've bought some time, and by the time January comes around, a supplemental request to put additional capitalization, if the fund has been drained down to zero, is there. So if we truly think it's a temporary, and we may not need $90 million— I, on the other hand, I would vote for us to capitalize it at the maximum available, and if it's not needed, then take some of that money next year. I'd rather overcapitalize it and make sure everybody who needs money— but if the caution is we don't want to commit $50 million, we only want to commit $15 million, I still see that what the department has described as their demand use is later in the fiscal year, so having it fully capitalized ahead of time, I don't know, is the most critical thing.

We are statutorily permanently changing what someone can borrow. So, Co-Chair Foster, in the queue I've got Representative Bynum, Stapp, Galvin, Schraggy, Josephson. Anybody else? Yes, Representative Bynum. Thank you, Co-Chair Foster.

Ultimately, the intent was to be able to provide a loaning mechanism in the event that the fund were to go to zero, and we aren't going to be in session to deal with that. So they're just going to be able to— they're just cutting off providing the loans. And timing is the problem here of when they need to go to contracts and when fuel is delivered. Fuel is delivered in August. So, and they're starting to go through that, the application process now, but they could need a loan at any time.

So obviously trying to tie up $90 million of UGF if it's not going to be needed is problematic. [Speaker:KARUBAS] But, and then the way that this amendment was structured is, is saying that it may— there's these may's and there's not an automatic trigger to repay and make the PCE whole. That's not intended either. So there's not an intention to take money from PCE permanently. It was only as a relief valve and then make PCE whole.

And then obviously that gives the legislature time when we come back in June and we've seen that this has happened and we might say we need to do additional capitalization into the fund. Without harming applicants from being cut off from a fuel loan. So, yeah, I'll leave it there. That was the intention, and that's kind of the fundamental functional problems that we have if we're trying to create a relief valve in the event that the fund would go to zero. Okay.

I've got Representative Stout. Yeah, I think, Coach Foster, I'm just thinking of this mechanism here. I don't— Potentially we would have to put some sort of language in the appropriation vehicle. I don't know if that is actually necessary. I am curious if the OMB director actually could probably just do that as they do CBR borrowing already for this specific fund.

So it would not, in theory, ever be decapitalized, right? So if this is money we are loaning out and getting paid back, I mean, it is kind of like a paper transfer, right? So I don't know. If they can't simply basically IOU it out of CVR already when they do that. So I don't know if we have the ability to get a hold of Director Saunders or even Director Painter.

They could probably kind of thread this needle pretty quickly, I would imagine. Maybe we'll see if we can get them online and then we'll come back to that question. Okay. Next question is to Representative Galvin. I don't have one.

No question. Okay. Representative Sharagi. Just a couple additional thoughts. If this were to be addressed through— if we determine that this is something we view as more of a permanent problem, and I understand we're permanently increasing the cap through this, but that doesn't speak to the demand.

We know that very few have hit that cap in current and prior years. And so to the extent there's demand on this fund in the future, I think that is somewhat still uncertain. But if we decide that there is going to be increased demand for the foreseeable future and we want additional capitalization, the most appropriate place to do that would be the operating budget. But at this point, the operating budget has passed the Senate. We are now to the point of conference, and you really need something that is in this bill that instructs the conference committee on how much this bill should be funded with.

Alternatively, you could go through the capital budget. It is less ideal. Just as a matter of format.

So I guess those are just some considerations and part of why I like this approach that is offered in this amendment. Again, acknowledging there are some technical difficulties with the amendment. The last thing I will just say is that we have been trying to get a better idea as to how much is currently in the fund. I know the fiscal note reflects that as of March 31st, there's $22 million available in the fund. I understand that these loans are being paid back through the end of May, I believe it is.

And so you'd expect, as funds are paid back, that capitalization, the funds that are available there, to grow. But really, we have not been able to get transparent information on that as of yet, or any sort of expected schedule of repayment and how much fun to what degree we— what amount of funding we expect to be repaid back into this fund. And so all of that just gives me a little bit of uncertainty still at this exact moment, and we're trying to clarify that. But I know we've been moving very quickly on this bill and trying to address the concerns, very real concerns that are out there. So I just wanted to offer all that for the committee's consideration.

Thank you. My plan moving forward— we still have another question from Representative Josephson, but What I'm thinking is we were trying to get a hold of Mr. Alexi. We have some questions on cleaning up the amendment, possibly some concerns or questions about capitalization, the balances, so forth. I'm thinking maybe if we go ahead and allow Representative Bynum to withdraw the amendment for now, we'll set the bill aside and then we'll work on this. So, Representative Bynum, thank you.

Thank you, co-chair. Do you need a question? Well, Mr. Co-chair, if I might. If I could, Mr. Chairman, a quick question for Sandra Muller, if she's— it looks like she's available and probably listening. Okay, go ahead.

Are you with us, Ms. Muller?

Yes, I am, Mr. Co-chair. So I'm looking at this—.

2-Page memo that you wrote to the committee, or was given to the committee. First, I appreciate that it's so easily readable, but I'm just curious. You say in Scenario A, all current borrowers need something, but then in Scenario B, you say all current borrowers will want something. And that's just interesting. So some— I'm just trying to get— and the importance of this is is the tables underneath each section.

So some villages, for example, will need something, but they won't do anything about their need because they won't act on it, and therefore they don't come into the will-want Scenario B. Is that what you're saying? Ms. Mohler, if you could put yourself on the record.

Yes, Mr. Chair, this is Sandra Mohler. I am the Director of the Division of Community and Regional Affairs, and to Co-Chair Josephson, in looking at that 2-page letter that went to Co-Chair Foster describing the different scenarios that we looked at, the words that you pointed out were inadvertent. There was no special connotation for it. So Scenario A is that the borrower would ask for the maximum loan.

And similarly with Scenario B, the borrowers would ask for an increased number. So it's not a need or want. Those were just words that were used. So I apologize for the confusion. But the difference is in Scenario B that our current borrowers would ask for an increase in their average number of number of amount of loan related to the fuel price.

So apologize for that uncertainty, and hopefully that clarifies. Yes, I don't have a follow-up, Mr. Chairman, just a comment that, um, the box I'm looking at is on page 2, 100% increase, fund capitalization $25 million. The problem that I want to let the committee know about is that I don't have eyes on unspent $25 million. Now, we're still way over $100 on Brent crude and ANS crude, and it could be added as part of a waterfall, but I don't think there is $25 million that isn't subscribed. So there's that issue.

Now, if someone made a motion to move the bill, I'd move the bill.

But I just wanted to let the committee know that. Okay.

Let's see here. We do have Mr. Painter in the room. Representative Stepp, did you want to ask the question? Mr. Painter, if you could please come up to the table. And Representative Stepp, if you would like to ask the question again.

Yeah, I think, Co-Chair Foster, through the Chair, Director Painter, thanks for being here. Obviously, I think you kind of know the —capitalization problem we are having with this potential not having funds available in the specific fund for them to loan out because of the nature of the cost and all that. So I am curious, mechanisms, can we direct the OMB director to basically backfill this thing like they do CBR borrowing in the event that the fund runs out so they can still capitalize the loans for repayment? Does it actually need to be in an appropriation vehicle, you think, that type of stuff, through the chair? Mr.

Pejor, if you could put yourself on the record. For the record, Alexi Pejor, Legislative Finance Division, through the chair of Representative Sapp. So with the Constitutional Budget Reserve, the executive branch can borrow to fulfill existing appropriations. In this case, there wouldn't be an appropriation that they're trying to fulfill. The revolving loan fund, the loans go out without an appropriation.

And so they can't just borrow to increase the amount they could loan. I mean, in theory, that would allow them to loan infinite dollars or however much is in the CBR in any loan fund, right? Which, I mean, there is no point in having an amount in the loan fund as a cap. So that mechanism would not be available. If you want to have more funds available for borrowing, more money needs to be appropriated to the fund or to the department for the purpose of making those loans in some manner.

All right. Thanks. Okay. We've got Representative Galvin. Thank you, Mr. Painter.

Since you're here and since we're talking about how we don't have enough funds to necessarily cover this right now that we know of, I wondered if you could give us any sense— the last time I reached out, I had heard that if the prices forecast average for the average price of ANS oil averages $91, we'd be about $94 million over the forecast. If prices average around $110, we would be around $273 million over forecast, and that was over a month ago. So I'm wondering if you have any new numbers for us just to give us a sense of whether a waterfall language would even make sense. Waterfall, that would be perhaps into the department so that they could allocate as needed for grant. Mr. Painter.

Through the chair, Representative Galvin, a large variable in that is that in front of the conference committee, the forthcoming conference committee on the operating budget, is a choice on an an existing appropriation in the other body's budget of totaling $207 million for two FY26 items, both an energy relief check for FY27 and then additional K-12 funding. So if that version of the budget is adopted, that would use a lot of the potential surplus available in FY26. It's possible prices will be high enough that you could do that and have money left over that could be used for something like that. Or if the conference committee went to something more resembling the House budget that does not include those appropriations, there may be money available. So it's really difficult to give a very confident answer in terms of where funds will be available because there's such a vast difference between the two bodies.

Representative Galvin. Thank you. So you know where the House is. I guess for now, could we just work with the House budget And then I appreciate that certainly there's been discussions already around where the Senate is in their budget, but if we could just have a sense of where we are with the House, maybe that would give us a starting point. And then you've already told us there's $207 million additional on the other side.

But if we could just work with the House budget and give us a sense of anything you're comfortable sharing with regard to forecast changes. Mr. Painter. Through the chair, Representative Galvin, so the House does not have any unrestricted general fund supplementals in addition to what was enacted in House Bill 289 already. So the House has a surplus even under the spring forecast. So if the amount needed is something like $25 million, the House unquestionably has that amount regardless of what the forecast is.

You know, even at the forecast, let alone with higher prices, if prices go up, it has a larger surplus. But in the House version, there's definitely funds available for this purpose. If the Senate version is adopted, then it's more dependent on oil prices. But I guess what I was saying with the difference here is that in the House version, there's, you know, a $30-something million surplus at the spring forecast level already. So if the need is $20-something million, it's already covered, or there's already enough for that.

[Speaker:COMMISSIONER ARKOOSH] Thank you. Thank you. And a follow-up. Would that include the $158— the one-time increment for education that we have in our budget. Does that— is that inclusive of that?

Mr. Painter, through the chair, Representative Gallivan, that appropriation is in FY27, so it wouldn't impact—. Sorry, that's right. Thank you. Okay, appreciate it.

Representative Hammond. Thank you, Co-Chair Foster. Let me get back to my original thought on the bill. The bill doesn't have a fiscal note, right? So passing the bill is independent of capitalizing the funds.

Is that correct, Mr. Painter? Mr. Painter? Through the Chair, Representative Hannan, for the conference committee to adopt a fiscal note that puts money in the fund, there needs to be some sort of— there needs to be a fiscal note. That can be prepared by the conference committee, but it has to be based on text that's in the bill. The conference committee can't make that up.

The bill as written doesn't really suggest that anything about short-term borrowing from another fund or anything like that. There's just really nothing in the bill that would suggest you could write a fiscal note like that. So if the goal is to get more money into the fund, the bill as written doesn't provide enough for the conference committee to adopt a fiscal note that would do that. You would need to change the bill in some way to do that. Okay.

So, Mr. Chairman, that is sort of a twist that we hadn't heard. Right? Because I was going to suggest that we try and move the bill on so that we can then deal with the appropriation, but if we need to amend this language so there is a fiscal.

Note that reflects that. Did we— was today the amendment deadline? Yes, I'm going to set the bill aside and we're flexible on the amendment deadline so we can make changes. Hey, Coach Foster, I think I had Representative Staff and then Representative Sharkey. Representative Staff.

Yeah, I think, Coach Foster, well, luckily I think we can break our own rules sometimes if we're in agreement, you know, but through the chair to Director Painter, So I guess, I don't know, what is the easiest way to kind of skin this cat here? Is it just to say we're adding $15 million or whatever to capitalization of the fund in the bill and then deal with it at conference committee? Through the chair. Mr. Painter. Through the chair, Representative Sabat, I think it comes down to what your goal is.

Is the goal to have additional money to lend out in just FY27, or I guess the FY26-27 this cycle, so a one-time infusion, or is the goal to permanently increase the size of the fund? Because the bill is written, you know, is a permanent increase to the loan cap. There's nothing suggesting there would be anything temporary. If the goal is to do some sort of temporary increase for just this year, you, you would need to have something temporary in the bill. But yeah, you could suggest a number, you could You know, it would also be possible for the other body to put in something, you know, closer to when the conference committee would be doing their actions, but it really depends on the goal, I suppose.

Yeah. Representative Stepp. Oof, that's all I got to say. Thanks. Roggie.

Yeah, Coach Foster, just really quick, I just wanted to apologize that all this is kind of coming up now. I only got this information earlier today, Obviously it's hard when this kind of stuff comes up last minute, but anyways, if I had been able to get all this into the discussion sooner, I would have. I just literally discovered a lot of this within the last couple hours, so apologies. Representative Bynum, did you already withdraw the— Representative Bynum? Thank you, Co-Chair Foster.

With all of that robust discussion, I will withdraw Amendment Number 1. Okay, thank you very much. Amendment Number 1 has been withdrawn. I'm going to go ahead and set the bill aside and we'll move to the next bill. So thank you very much, Mr. Mr. Painter, for being here.

Okay. And so next up we have before us House Bill 193. That is the Paid Parental Leave Bill. I'd like to invite up Representative Hall as well as her staff, Ms. Joan Wilkerson. If you could please come up to the table and just give us a very brief reminder as to what the bill does, just high level, and then we'll, we'll jump right into amendments.

Good afternoon, Co-chair Foster, Co-chair Josephson, and Co-chair Schraggi, and members of the House Finance Committee. My name is Carolyn Hall, and I represent the West Anchorage neighborhoods of Churning and Spenard and Sand Lake. I love microphones. Um, and also known as House District 16. And with me here is my chief of staff, Joan Wilkerson.

What HB 193 aims to do is two things. One is update the unemployment insurance benefits that have not been touched since 2009 as the fund is dramatically overcapitalized. And the second thing the bill does is it would create a paid parental leave program. Great. Thank you very much.

And so with that, we'll jump right into amendments. And let's see, Amendment Number 1, Representative Hammond. Thank you. I move Amendment 1. Check.

Representative Hannon. So Amendment 1 creates a parental leave fund account as a separate fund in the state treasury to— in which to deposit and capitalize the employer and employee contributions to the paid parental leave program. This will allow the fund to avoid the sweep so that the paid parental leave fund can grow and provide for the benefit for which it is being collected. The amendment will help ensure the solvency of the paid parental leave fund, and I encourage your support. Okay.

Any questions? I'm just curious. Sponsor's take through the chair. Representative Stapp. What was the question?

Oh, I'm curious on the take of the bill sponsor. Oh, sure. Through the chair. Representative Hall. Through the co-chair.

Thank you for the question, Representative Stapp. This is a friendly amendment. Any further questions? Comments?

Seeing none. Representative Stapp, do you maintain your objection? I withdraw the objection. Okay, the objection is withdrawn. I don't see any further objections, so Amendment Number 1 to House Bill 193 has been adopted.

And that takes us to Amendment Number 2. Representative Sharagi?

Oh, brief it is. Brief it is.

House Finance back on record at, uh, 2:12 PM. Representative Shruggie. Thank you, Coach Foster. Sorry for the delay. Papers are a little out of order here.

I'm not going to offer Amendment 2 at this time. Okay, Amendment 2, not at this time. Amendment 3, Representative Hannon. I move Amendment 3. Check.

Representative Hannon. So Amendment 3 reduces the number of weeks available to receive paid parental leave benefits from the original span of 8 to 26 to 8 to 12 weeks. I'm offering this amendment at the suggestion of the Department of Labor to best ensure the solvency of the paid parental leave fund. And I believe the sponsor was involved in that development of the change in range. Rep. Paul.

Mr. Co-chair, this is a friendly amendment, and what Representative Hannon conveyed is true and accurate. Withdraw my objection. Object. Just—. Rep. Sandefur-Josephson.

Uh, for the sponsor, uh, of the bill, or for the maker of the amendment, um, the— I think you, Rep. Hall, you, you said this was a friendly amendment. Can you tell us why?

In part, I'm asking, of course, about the sustainability of the program. To the extent you can get into that, that would be helpful. Representative Hall. Through the co-chair, co-chair Josephson, I appreciate the question very much. This amendment came about through multiple conversations with members of the business community and economic development corporations as well as with the Department of Labor to where the max of 26 weeks that's in version L right now, there are significant concerns about the solvency of the paid parental leave fund.

And additionally, when it comes to businesses, how they'd be able to administer a length of time of that duration when it comes to having an employee out for that long and how they would manage the work in their absence. Additionally, this comes at the recommendation of DMACC, which is the Disability Management Employer Coalition, and they, they basically help businesses administer disability and leave programs across the nation, and they said that the national average for a leave program of this type is 12 weeks. And further, this would also protect the Paid Parental Leave Fund when it comes to the Department of Labor having the flexibility to determine between 8 weeks and 12 weeks. So it's really a mechanism to protect the fund over the long term so that it so that it doesn't become a benefit in now, but then in later years, something that is not sustainable. Follow-up, Representative Josephson.

Since I don't know these sorts of details, Representative Hall, could, could a mother take 12 weeks return to work and the father then take 12 weeks? To your understanding, Representative Hall.

Through the co-chair, Representative Josephson, I believe the answer is yes.

But I'm going to turn to my chief of staff, Ms. Wilkerson, to see if she has a better answer than my questionable yes. Ms. Wilkerson, if you can put yourself on the record. For the record, Joan Wilkerson,.

Bulger, staff to Representative Hall. Through the chair, the answer is yes, both parents have this benefit available. The fact that they share the same child doesn't mean that only one of them gets to take the benefit. Thank you. I will remove my objection.

The objection has been removed. Representative Nelly, would you like to object?

Just for a question. Object. Okay. Representative Melley. Just for a—.

Chair Mee. Thank you, Co-Chair Foster. You say for both parents, do they both have to be working or is it just one parent working and they both benefit from it? Representative Hall. Through the co-chair, Representative Mee, if I'm understanding your question correctly, a person is eligible for the program if they are paying into the program.

So if there is one of the parents is, let's say the father is working for a business that is not a participant in this program, then they would not be eligible to take the leave. But if the, if the woman who is pregnant was eligible and chose to take the leave, then yes, I mean, she would be eligible. So it's about who's paying into the program. I remove my objection. The objection has been removed.

Hearing no further objections, Amendment 3 has been adopted. I would like to also recognize that we have with us in the audience Representative Eichide. Thank you for being here. Next up on Amendment 4, Representative Hannon. I move Amendment 4.

Check. Representative Hannon. This amendment allows employers that would otherwise be required to participate in the paid parental leave program to apply for authorization to opt out if they have an existing similar program that is at least as generous or more so than the paid parental leave program established in the bill. Employers would need to provide proof of their program through a collective bargaining agreement, employment contract, or employment policy, and the provisions of the amendment would be monitored by the Department of Labor. Withdraw my objection.

Okay, the objection has been withdrawn.

No further objection. Amendment number 4 has been adopted. I'd also like to recognize that we have in the audience Representative Fields. Thanks for joining us. Okay, and so that takes us to the next amendment, which is Representative Sharagi, Amendment number 5.

Again, Coach Foster, I'm not going to offer this at this moment. Okay, not at this time. So that takes us to Amendment Number 6. Representative Gelvin.

I move Amendment Number 6. Okay, here I'll just keep objecting. Why not? Okay, Representative Gelvin. Okay, uh, this amendment postpones the first day that eligible employees can receive paid parental leave, uh, from the first day of 2027 to the first day of 2029, it allows for a more reasonable timeline to implement the paid parental leave.

Remove my objection. Okay, the objection has been removed. Hearing no further objection, that next takes us to Amendment Number 7. Representative Moore. Uh, thank you, Co-Chair Foster.

I move, um, Amendment Number 7. Object. Okay, Representative Moore. Okay, Amendment Number 7 does 3 2 things. First, it identifies employees who are exempt from participation in the paid parental leave program because of their work— because their work would be seasonal.

This measure was taken at the request of seasonal employers who cannot afford to allow short-term employees to take several weeks off during peak season. The employer will pay into unemployment insurance on their behalf, but the employees are not required to contribute to paid parent leave and the STEP program. Number 2, it excludes the participation of employees who work for an employer with fewer than 50 employees. This change is made at the request of stakeholders, small businesses who cannot afford to have an employee absent for several weeks. The threshold of less than 50 employees is common for other benefits and entitlements such as the Federal Family Medical Leave.

And then number 3, lastly, it creates an opt-in process for employee for employers who would like to participate in paid parental leave but are exempt from participation. And it requires the departments to draft regulation to establish the process. Okay. And discussion? Yes, Representative Jose— actually, if we could first maybe go to the sponsor, Representative Hall.

Your thoughts? Thank you, Mr. Co-chair. This is a friendly amendment and This was largely drawn off of lessons learned from Ballot Measure 1 when it comes to the difficulties that some small businesses encounter when it comes to administering all types of leave. Okay. Thank you.

Representative Josephson.

Yes. Not a question, more of a comment. I like part of this and don't like the other part. The part that troubles me is lines 2 and 3. We heard that most employees in Alaska work because the companies are larger, in larger companies.

But in terms of numbers of companies, maybe I have this right, um, that, that most companies are smaller than 50 persons. A 50-person company in Alaska is vast. It's large. Um, the largest law office in Alaska is probably not much bigger than that. I just, I just, I don't like limiting this benefit in this way.

I mean, my sense of this, and I wasn't blessed with children, but my sense of this is if you have a newborn baby, you want time to bond with your baby. That's the essence of it, I think. And if you're in a small gift shop you still have that need. And I just don't know that I can vote yes on this amendment. Further discussion?

Representative Galvin. Thank you. I do appreciate especially part 3, where those who are in smaller businesses may opt in. So my guess is that if they wanted to attract young workers, they would find a way to opt in It sounds like that hasn't been worked out with regards to regs, that they've— that's part of this bill. And I just wanted to add that for me, I appreciate that very much because I think the forward-looking employer would do what they could to make sure they're offering this.

It's a big perk for anyone who intends to have a family. So thank you. Representative Sharkey. Kucher Foster, I agree with the concerns of my co-chair to my right here. I also recognize that there is a burden on smaller employers.

I used to manage a company with about 20 employees and probably right on the verge of where this is difficult to manage. I wonder if the amendment sponsor and the bill sponsor would be amenable to maybe 25 instead of 50. And maybe I'll just make that as a conceptual amendment to change it from a threshold of employer of 50 or more employees on line 2 to instead be an employer of 25 or more employees.

So that motion— you've made the motion? Yes. Okay. Is there an objection? Okay.

We do have an objection. And I think you've spoken to that. So we'll go to questions. Representative Schraggi, or he explained it. Sorry, I explained it.

He explained is what I meant to say. And so, Schraggi or Representative Stapp. Stapp and Schraggi, they're very much alike, but not really. Representative Stapp. Don't read into that too much.

Ding! I didn't know House Finance was going to be a roast today, Mr. Grover.

I'm going to probably withdraw this objection. I just think— so I've done employee benefits for companies for a lot of years now, and basically if you got 25 or 50 more employees, you're going to have a pretty robust benefits package, especially if you're over 50. Even if you're over 25, very rarely you're going to find a company that has less than 25. So to me, it's like, even if you exempt them at 25, and I mentioned this, or in under, the people who are really going to benefit from this are like the 3 to 5 businesses. They're not going to have any benefits, right?

I mean, that's just like the small, tiny businesses are the ones that are actually going to have some utilization of this. You know, when you get over 50 or even over 25, most of these employers going to end up opting out of this program because they are going to have some sort of at least maternity leave. That is kind of the big rub here with this bill. So I have said my piece, withdraw my objection. The objection is removed.

And so before us is conceptual amendment number 1 to amendment number 7. Any further objections? [SPEAKING IN FOREIGN LANGUAGE].

Removed his objection to the conceptual amendment, so we're now to amendment number 7 as amended by conceptual amendment 1. Correct. I was just checking to see if there's any further objection to conceptual amendment number 1 to amendment number 7. Does anybody else have an objection? Seeing none, conceptual amendment number 1 to amendment number 7 is adopted.

And so that now takes us to the amendment number 7. Any further discussion? Looks like I— last person I had on my list was Representative Schraggy, and so we're covered there. And any further discussion? Amendment number Senator Simpson.

Just briefly. I'm still a no vote on the amendment. I just don't know enough about the data, the statistics, the impacts, the cost.

Surely the program is more solvent by reducing the numbers. But I— this is not— I want to be clear. I don't spend a lot of my time thinking about paid parental leave. I don't. But when I do, and I am currently, I want it for everyone or not.

So that's why I'm opposed. Okay. And Representative Josephson, you maintain your objection to Amendment Number 7? Okay. The objection is maintained.

Representative Galvin, did you have a question? No. Okay. Okay. The objection is maintained.

And so with that, Madam Clerk, if you could call the roll for Amendment Number 7. Which has been amended with conceptual amendment number 1. Madam Clerk. Representative Stapp. Pass.

Representative Tomaszewski. Yes. Representative Hannan. Pass. Representative Jimmy.

Pass. Representative Moore. Yes. Representative Allard. No.

Representative Galvin.

Representative Bynum? Yes. Representative Stapp? I'm going to support my member. Yes.

Representative Hannan? No. Representative Jimmy?

Yes. Representative Josephson? No. Representative Schrag. Yes.

Representative Foster. Yes. 8 Yea, 3 nay. So on a vote of 8 yea, 3 nay, Amendment 7 as amended has been adopted. And I would also like to recognize that we have in the audience with us Representative Underwood.

Thanks for joining us. See if we have anybody else out there. We next are on Amendment 8. Representative Moore. Thank you, Co-Chair Foster.

I move Amendment 8. Okay, and I'll object for discussion. Yes. Okay, Representative Moore. Amendment 8 reduces the amount of the paid parental leave benefit from the original maximum UI base period wages of $85,000 with a weekly benefit amount of $817 to the UI base period wages at $54,500 with a week— with a new weekly benefit amount of $524.

This reduction is intended to provide a new increase to the, to the $300, the current $370 UI weekly benefit rate, which has not changed since 2019. The $54,500 figure is the equivalent to the FY26 taxable wage base. Reducing the benefit amount would preserve the solvency of the UI trust fund and the paid parental leave fund, and that would be making it longer than the former benefit amount. This is just a note under statute. A.S. 23.20.175 is the citation to the average annual wage currently.

Okay. And Representative Josephson? Yes, through the Chair for Representative Moore. The language right now uses a CPI-based adjustment in the bill and you're using something different. And is there a way to explain your— the narrative part?

Lines 7 to 14. Senator Moore. Through the chair to Representative Josephson. Yes, we'll have the sponsor explain. Representative Hall.

Thank you, Co-Chair Foster. Through the co-chair, Representative Josephson. Yes, this comes at the suggestion from the Department of Labor and the reason why we want to have the benefit tied to the taxable wage base, the average taxable wage base, instead of CPI, is, is because wages fluctuate and increase at a different pace than CPI. And so it's important to make sure that the benefit that is being paid out is tied to the wages because this is a supplemental wage benefit that is being, being distributed. Follow-up?

Follow-up? For the sponsor, is there any way to know whether the reduction both— well, whether the reduction in weeks for PPL makes affordable the previous $817 number? Is there— perhaps Mr. Weller could speak to that. I don't— in other words, we have adopted much less paid parental leave. Does that make the higher weekly allowance more affordable?

Representative Hall. Through the co-chair, Representative Josephson, if I'm understanding your question correctly, when you say more affordable, do you mean more sustainable for the paid parental leave program over the long term, the health of the fund, the solvency? Yes. And I know there's separate funds now, but I'm just not able today on the 7th of May to know whether the reduction in the PPL period now makes it more affordable to keep the $817 as opposed to the $524. Representative Hall.

Through the co-chair, Representative Josephson, thank you for that clarification. This amendment comes in coordination with the Department of Labor, and yes, even though So there is a reduction in the weekly benefit. This also is important to ensure that we have the two things. It is protecting the long-term solvency of the PPL trust fund, but additionally it matches what the current average weekly wage base is today. So that is an additional reason to have the benefit be at at what is in the amendment versus what the $817 were.

Thank you. Further representative Goldman. Thank you. And this is to the sponsor again. Thank you.

I appreciate ensuring the solvency of the fund and why you might want to make that amendment. Thank you. My question is if there was some comparative work done to know what other states are doing and if this still works out to be something that is competitive. In other words, close to what other states are doing so that it would still attract and perhaps retain families in the workplace. I think it is, but I just wanted to double-check.

Representative Hall.

Through the co-chair, thank you for the question, Representative Galvin. I probably have at the very back end of my notebook here part of an answer to your question. I know explicitly that other STARTs are increasingly adopting leave programs for the reasons that you've stated. I don't have the exact data that you're requesting in front of me, but I'm happy to keep That's okay. I can— that's something I can get offline.

It's not going to stop me from supporting this amendment. Thank you. Representative Stout. Yeah, I think, Chair Foster, I'm going to be in support of the amendment. It makes the kind of unsustainable draw on it a little bit more sustainable.

I don't think it'll, you know, keep it around in perpetuity. It'll still draw down. It'll just draw down a lesser rate. So more fiduciary sound. So yes.

Further questions on Amendment Number 8? I just have a comment through the chair. Thank you to Representative Galvin. You were asking how many states have enacted— Yeah. Okay.

I don't know at this level. I don't know. But 13 have paid parental leave. Okay. Representative Hall.

Thank you, Co-Chair Foster. Additionally, I have in front of me an article That was shared with me from March 13, 2006, from the Center for American Progress. The headline says Fast Facts About Paid Leave in Virginia, and cited on page 3, it says, how much money will workers receive when they take leave? It says workers will receive 80% of their average weekly wages up to a cap. The maximum weekly benefit will be equal to the Virginia state average weekly wage and adjusted each year.

In 2026, the Virginia state average weekly wage is $1,507.01.

Representative Hannan. Thank you, uh, Co-Chair Foster, and this is to the sponsor because I'm confusing myself.

Looking at notes and amendments at the same time. But this change in rate, does it apply to both the paid parental leave and the weekly UI benefit if you were not collecting it under paid parental leave but you were just receiving unemployment insurance? Representative Hall. Through the co-chair, Representative Hannan, the answer is yes. It applies to both.

Questions? Amendment number 8. Seeing none, Representative Josephson, you had the objection. Do you maintain your objection?

Oh, you would ask that? Uh, no. Okay, the objection has been removed. Yes. So with that, hearing no, do you object, Gribsen-Valard?

Object. Okay, Representative Mr. Saab wants to get his paid leave retroactive.

Rips him, Saab.

Thanks. I remove my objection. The objection has been removed. Okay. Hearing no further objections, number 8 has been removed— I mean adopted.

We are getting punch drunk here. Okay. Senator Schrag. Thank you, Co-Chair Foster. If we could, with the committee's indulgence, go back to Amendment 5.

I'd like to move Amendment 5 now. Okay, Amendment 5 has been moved. Any objection? I object. Thank you, Representative Schrag.

Thank you. Amendment 5 funds the paid parental leave program by increasing the original bill's employer contribution to the unemployment insurance from 0 to 0.3%, so it adjusts the floor. This amendment would help prolong the solvency of the Unemployment Insurance Fund by continuing employer contributions. This would slow down the reduction of the UI trust fund's overcapitalization, but also improve the solvency of the fund. I would note that there is a technical error from Ledge Legal, a numerical error on this amendment.

So I'm going to move Conceptual Amendment Number 1 to Amendment Number 5. And what that would do is on line 9 of Amendment Number 5, it should be— we need to change the 0.30 to 0.20. Let me see if I got this right. Yes, in the bill is currently 0.20, and we need to And then it says— Go to above 0.30%. So it should be line 9 of the amendment, change 0.30% to 0.20%, and then insert above 0.30%.

Object. Okay. And we have an objection, Representative Stepp. There is an objection to the conceptual. Yeah.

I am just objecting to get to the right page in time. Okay. I think, Co-Chair Schrag, you might—. Did I misstate that? Yeah, you're deleting it.

I think you just need to make the amendment just gotta say 0.20 'cause that's what the text in the bill says. No, it's 0.30. We just need to take out the 0.30. We want to delete the 0.2, sorry. You wanna change your 30 to 20, basically.

I think for the record, let's try to keep it straight here. So I think we had Representative Stepp, did you have a—. Yeah, just to clarify, just have the co-chair clarify the— the conceptual amendment really quickly. Yes, thank you, Chair Foster. Sorry for the confusion.

All right, the bill on line page 12, line 7 currently says above 0.20%. The amendment on line 9 says delete above 0.30%. That's not accurate because the bill says 0.20%. So we want to delete— we want the amendment to say delete above 0.20% and insert above 0.30%. I withdraw my objection to the conceptual amendment.

Okay, so that was— I don't hear any further objections to conceptual amendment number 1 to amendment number 5, so that's been adopted. And going back to the main amendment number 5, um, any further discussion? I'll check with Representative Hall. Could I have an at ease? Brief at ease.

Okay. Going to call House Finance back on record at 2:53 p.m. Representative Sharagi. Thank you, Co-Chair Foster, for the extended at ease there. Just dealing with technical changes here and drafting issues. Wanted to make sure we had things right after consulting with the department legal and the bill sponsor.

I believe the amendment is correctly structured as conceptually amended. And so I have nothing further on this unless there are questions. Okay. And if you could just repeat one more time, the conceptual amendment changed what? Yes, the conceptual amendment on page 12, well, let me just go here.

Amendment number 5 has been conceptually amended to say delete above 0.20% and replace that with above 0.30%. So that when you get to the underlying bill on page 12, if this amendment is adopted, on page 12 of the bill, line 7, it will say above 0.30% if this amendment is adopted.

Any questions from the committee? Okay, seeing none, um, If there's no further discussion, Representative Hall, did you have anything before I go to wrap up with Representative Sharagi? Co-chair Foster, this is a friendly amendment and helps ensure the solvency of the paid parental leave program fund. So it is a friendly amendment. Okay, thank you.

Before I go to wrap up, Any— Representative Bynum? Thank you, Co-Chair Foster. Through the Chair, Representative Hall.

So this sounds like this was obviously something that was worked out. Do we know, like, overall, what does this then do for the overall tax rate as far as what we would then be applying for tax— the taxes on the plan? I'm looking at the old— the slide deck that was presented to us on April 24th, 2026, and I'm not sure that we actually heard it on that day, but that's what the date of the slide deck is, where we showed the modified structures. So I'm looking at slide 3, and I believe that that would take the employer UI tax from 0.0% minimum to a 0.3. Does that sound right, Representative Paul?

Uh, through the co-chair, Representative Bynum, that is correct. And previously, co-chair Foster, when I said that it protects.

—Of the paid parental leave program. I misspoke. That is to protect the solvency of the UI trust fund. Representative Bynum. Follow-up.

Thank you. So ultimately the employer minimum tax would then be, as this amendment would say, would go from 0.3 overall to 0.6%? Representative Paul.

I think he's confused. Co-chair Foster, I am going to defer to my chief of staff, Ms. Wilkerson. Ms. Wilkerson. For the record, Joan Wilkerson, staff to Rep. Hall.

Through the chair, Representative Bynum, the answer to your question is that this adjustment would result in 0.3% increase in tax from the original version of the bill for the employer contribution to UI, plus 0.3 existing for the STEP program, and 0.2 to the paid parental leave program.

That language isn't in these amendments because it's already in version L of the bill. And just so folks know, we do have online Ms. Paloma Harbor as well as Lennon Weller from Department of Labor. So, Representative Hall, Co-Chair Foster, to Representative Bynum, so when it comes to The tax of— it is a total of 0.60% and that is the combination of the UI and STEP contributions.

Thank you. Okay. Any further discussion before we go to wrap-up? Seeing none, Representative Sharagi? No wrap-up.

Okay, no wrap-up. The objection was by Representative STEP. Do you maintain your objection? I withdraw the objection. Objection has been removed.

Any further objection? Checked. Representative Bynum, would you like to speak to your objection?

I think we're okay. I think we've discussed it enough. I just— okay, okay. Madam Clerk, we are on Amendment Number 5 as conceptually amended by Amendment Number 1. And with that, if you could please call the roll.

Representative Hannan. Yes. Representative Allard. No. Representative Stepp.

No. Representative Jimmy. Yes. Representative Moore. No.

Representative Galvin. Yes. Representative Tomaszewski. No. Representative Bynum.

No. Representative Josephson. Yes. Representative Schraggy. Yes.

Representative Foster? Yes. 6 Yea, 5 nay. So on a vote of 6 yea to 5 nay, Amendment Number 5 as amended has been adopted. Do we have any further amendments that were rolled or not at this time that folks would like to reintroduce?

Hearing none, we have a number of amendments that were rolled into this bill.

Because of the complexity of this bill, I think what the plan is going to be is to go ahead and set the bill aside and allow legislative legal to incorporate the amendments into a CS so that we have a clean version for everybody to see and understand. So with that, we're going to go ahead and do that. Representative Bynum. Thank you, Co-Chair Foster. If it's, if it's not too much, —effort through the chair to the bill sponsor.

Would you be willing to update the information provided in the packet specifically related to the slide decks that were provided for the purposes of the committee and then provide those to the committee so that we can align those with our legal copy when we get it? Representative Hall. Through the co-chair, Representative Bynum, you are talking about basically creating another— an updated PowerPoint that outlines what is in the CS based on the amendment process we just had. Representative Bynum. Yes, that is correct.

We had some recommendations that were brought to us before. Some of those were adopted, or a lot of those were adopted, and then the slide deck demonstrating the amounts of money going where they were going. So if it's not too much—. Senator Paul, through the co-chair, Representative Bynum, that makes a lot of sense to me, and I'm very happy to do that. Thank you so much.

Okay, so with that, our next meeting is scheduled for tomorrow at 9:00 a.m., and at that meeting we'll have Senate Senate Bill 214, that is the capital budget. And then we also have Senate Bill 23, civics education. And so if there's nothing else to come before the committee, we'll be adjourned at 3:01 PM. Thank you.