HFLR-20260513-1030

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Will the House please come to order? Will members please indicate their presence by voting?

Will the clerk please tally the board? 38 Members present. With 38 members present, we have a quorum present to conduct business. Mr. Majority Leader.

Mr. Speaker, may the journal please reflect that Representative David Nelson has been previously excused from a call of the House. Leading the invocation this morning is Pastor Chris Elliott of the Radiant Church. Members, please rise.

Please join me in prayer. Most gracious and merciful God, I come before you today with a grateful heart and with an understanding that every session of this legislative body is in truth an act of stewardship before you. You, O Lord, who set the boundaries of our rugged coastline and number the days of every Alaskan soul, have also ordered this moment in time and placed these men and women here with intentionality and purpose. I ask that you would grant them clarity of mind when the difficulty of their work feels overwhelming, steadiness of heart when the pressure threatens to distort their judgment, and the rare and beautiful gift of genuine humility, the kind that listens well, weighs everything carefully, and wisely chooses what is best. Guard them from the kind of cynicism that comes from long seasons of hard work, from the weariness that misunderstands staying busy for making progress, and from the subtle drift of placing personal advantage above the common good.

I ask that you would renew their commitment to serve as Christ served, who came not to be served but to serve, and to give his life as a ransom so that those entrusted into his care might flourish. I ask for your hand of blessing on the work of this day. Bless Alaska, its families, its frontiers, and its future. I ask these things in the mighty name of Jesus. Amen.

Representative Prox, will you please lead us in the Pledge of Allegiance?

Under God, indivisible, with liberty and justice for all. Representative Story. Thank you, Mr. Speaker. I move and ask unanimous consent that the prayer be spread across the journal. Hearing no objection, the prayer will be spread across the journal.

Will the clerk please certify the journal for the previous legislative days? I certify as to the correctness of the journal for the 113th legislative day. Mr. Majority Leader. Mr. Speaker, I move and ask unanimous consent that the journal of the previous day be approved as certified by the Chief Clerk.

Hearing no objection, the journal stands approved. Are there guests for introduction this morning? Representative Stapp.

Well, thank you, Mr. Speaker. It is my great privilege to introduce 3 guests for introduction this morning. First, I have my Assembly member, my neighbor, my constituent, Nick Laginas, behind me in the Taylor Gallery. He's come down here to lobby again on the greatest bill ever, which is my bill, Mr. Speaker, the spay and neuter statewide program. He's a big animal advocate, a great constituent, neighbor, and great Assembly member.

And also behind me in the Taylor Gallery, Mr. Speaker, I have two wonderful guests who I just met a little bit ago from Canada in the province of Ontario. I have Emmett Mark, who is a lobbyist from Ottawa, but luckily he's not here to lobby us, Mr. Speaker, he's here on vacation. And, uh, Alex Kilby, uh, he's IT from the metropolis of London, but it's not the one you think, it's the one in Ontario that no one's ever heard of. And, uh, they are 3 days into a wonderful Alaska cruise, and I'd ask everyone, uh, give a round of applause, introduction of the guest.

Are there additional guests for introduction this morning? Seeing none, Madam Clerk, are there any messages from the governor? There are no messages from the governor this morning, Mr. Speaker. Are there any messages from the other body? Messages dated May 12th stating the Senate has passed and is returning the following: committee substitute for House Bill number 1, State Affairs, specie as legal tender.

Also, the president has granted limited powers of free conference to the Senate conferees considering Senate Committee Substitute for Committee Substitute for House Bill 263 Finance, amended Senate, and Committee Substitute for House Bill 263 Finance, amended Appropriations Operating Budget Funds and Supplemental, and also granted limited powers of free conference to Senate Committee Substitute for Committee Substitute for House Bill 265 Finance, and committee substitute for House Bill 265 Finance, amended appropriations mental health budget on the following specific points: the appropriations and language that are not identical in the House and Senate versions of House Bill 263 and House Bill 265. The Senate has also passed and is transmitting the following for consideration: committee substitute for House Bill 170 Finance by the Senate Finance Committee, entitled an act relating to gaming, relating to gaming activities on Alaska Marine Highway System vessels, relating to bingo, relating to pull tabs and electronic pull tab systems, relating to the powers of the Department of Transportation and Public Facilities, relating to the Alaska Marine Highway System Fund, and providing for an effective date. Labor and Commerce Committee. Committee substitute for Senate Bill 249, Judiciary, amended by the Senate Judiciary Committee. Entitled An Act Relating to Virtual Currency Kiosks, Relating to Transactions Involving Virtual Currency, Relating to Unfair Trade or Deceptive Acts or Practices, and providing for an effective date.

Labor and Commerce Committee. Committee substitute for Senate Bill number 282, State Affairs, by the Senate State Affairs Committee, entitled An Act Relating to the Joint Armed Services Committee, and providing for an effective date. State Affairs Committee. I have no further messages from the other body. Madam Clerk, are there any communications?

Letters of disclosure received from the Select Committee on Legislative Ethics as required by AS2460 were published in House Journal Supplement Number 16 and Senate and House Joint Journal Supplement Number 19. I have no further communications. Are there any reports to standing committees? The Finance Committee considered House Bill number 193, Unemployment Benefits Paid Parent Leave, recommends it be replaced with Committee Substitute for House Bill 193 Finance with a new title, attached one new zero fiscal note and two new fiscal notes. Signing the report do pass, Representatives Jimmy and Co-Chair Foster.

Amend, Galvin, Allard, Hannon, Tomaszewski, Stapp, Moore, Bynum, and and Co-Chairs Schraggy and Josephson. The bill has no further referral.

The State Affairs Committee considered House Bill 281, Cash Transactions Rounding, Attached 1 New Zero Fiscal Note. Signing the report, do pass Representatives Vance, McCabe, St. Clair, Holland, Story, and Chair Carrick. Amend Hemmschulte. The bill has a further referral to the Finance Committee. The Education Committee considered House Bill 387, Alaska Native Languages Academic Task Force.

Recommends it be replaced with Committee Substitute for House Bill 387 Education with the same title. Attached one new indeterminate fiscal note. Signing the report: do pass, Representatives Aishai, Dybert, and co-chairs Storey and Hemmschulte. No recommendation: Underwood. Amend: Schwanke.

The bill has no further referral, and I have no further reports of standing committees.

Are there any reports of special committees? There are no reports of special committees this morning. Are there any citations or resolutions for introduction? Honoring Christy Tibbles by Representative Schwanke. Honoring Food Bank of Alaska Thanksgiving Blessing by Senator Wilkowski.

In memoriam Betty Jean Maynard by Representative Moore. In memoriam Ralph James Halbert by Representative Johnson. In Memoriam Larry Dale Evans by Senator Wilkowski and Representative Mears. I have no further citations or resolutions for introduction. Are there any bills for introduction?

There are no bills for introduction this morning. Brief at ease.

Will the House please come to order. Mr. Majority Leader. Yes, Mr. Speaker. Um, at this time I would like to move and ask unanimous consent that we set an amendment deadline to the capital Budget, which is Senate Bill 214, for 2:00 PM today, that all amendments be delivered to the Chief Clerk's office by 2:00 PM today for Senate Bill 214, the capital budget.

Hearing no objections, so ordered. This brings us to the consideration of the daily calendar. Madam Clerk, please read the first item on today's calendar. House Bill number 202 by Representatives Johnson by request, Mina, Fields, McCabe, Bynum, Stapp, Tilton, Schwanke, Burke, Tomaszewski, Prox, Carrick, Underwood, Colon, Foster, Elam, Vance, G. Nelson, Moore, D. Nelson, and Sadler, entitled an Act Designating Giant Cabbage as the Official State Vegetable and Providing for an Effective Date. The State Affairs Committee considered the bill, recommends it be replaced with Committee Substitute for House Bill 202, State Affairs, with a new title, attached 1 new zero fiscal note.

Signing the report do pass, Representatives Vance, McCabe, Sinclair, Holland, Hemmschulte, Story, and Chair Carrick. There is one committee substitute. Mr. Majority Leader. Mr. Speaker, I move and ask unanimous consent that the State Affairs Committee substitute for House Bill 202 with the new title be adopted in lieu of the original bill.

Hearing no objection, the State Affairs Committee substitute has been adopted. Madam Clerk, are there any amendments? I have no amendments, Mr. Speaker. Mr. Majority Leader.

Mr. Speaker, I move and ask unanimous consent that the State Affairs Committee substitute for House Bill 202 be considered engrossed, advanced to third reading, and placed on final passage. Hearing no objections, so ordered. Madam Clerk, please read the title for the third and final time. Committee substitute for House Bill number 202, State Affairs, by the House State Affairs Committee, entitled An Act Designating the O.S. Cross Cabbage, Commonly Known as Giant Green Cabbage, as the official state vegetable and providing for an effective date.

Representative Johnson. Thank you, Mr. Speaker. So it's good to have something fun to talk about. Um, and this is a glorious day. Finally, Alaska's, uh, giant green vegetable, the cabbage, gets this moment in the spotlight.

This was a rules by request— or I'm sorry, not a rules by request, but a by request for me from a resident of Palmer that has lived there for a long, long time. And I just want to give a shout out to Richard Estelle. He's a local, a local colonist kid that just has a real heart for our community. Now, some people would think if you hear the word a Cabbageville that maybe we have nothing else to do, and that's of course not true. This is really a marketing.

It is a piece of our marketing of Alaska and our agriculture, and we have not ran out of problems to solve. But you have to look at the cabbage and think it's resilient. It's enormous. It's And it somehow survived so many conditions that, that would never thrive in other states, Mr. Speaker, and certainly never get this big. 90 Years ago, we had our first cabbage weigh-off, 1936, and well before we became a state.

And for only 4 years during World War II has there not been a cabbage weigh-off in Palmer at the State Fair. And every year the cabbage has been the world, that world record. Scott Robb, a few years ago, about 4 years ago, he had the largest cabbage in the world ever, and that was 138¼ pounds. He rolled that out, that huge giant, and that has never been topped. Cabbages are also nonpartisan.

One of my favorite historical photos is a photo of John F. Kennedy, who kicked off his New Frontiers campaign in Alaska in 1959 and was at the Alaska State Fair in this picture holding a giant green cabbage. So to boil it down, Mr. Speaker, In a Capitol where we often debate things that make people lose their heads, it's refreshing to support something that just comes naturally. And I would like to urge a yes vote. Let us leave partisanship behind and let's move towards a brighter, greener future. Thank you.

Seeing Representative Jimmy. Thank you, Mr. Speaker. I would like to speak on Why I am supporting this bill. Even though this is a vegetable and it's not something that's naturally grown in Alaska, it does go good with seal oil. So I urge a yes vote.

Seeing no further discussion and no need for wrap-up comments unless Representative Johnson, you want to bring your seal oil to the— into the discussion. Yeah, thank you, Mr. Speaker, and I appreciate that. Um, the, uh, uh, gosh, I had a— I had that— that just brought something to mind, but, um, I appreciate that comment. The cabbages, uh, feed a lot of communities, and they prove with enough daylight and determination, Mr. Speaker, we can do a lot here. We can grow just about anything, including this legislation.

So, Mr. Speaker, I would ask that everyone Press the cabbage-colored button. Are you ready for the question? The question is, shall committee substitute for Hospital 202, State Affairs, pass the House? Members may proceed to vote.

Will the clerk please lock the roll? Does any member wish to change his or her vote? Will the clerk please announce the vote? 38 Yeas, 0 nays. The vote of 38 yeas to 0 nays, House Bill 202 has passed the body.

Mr. Majority Leader. Mr. Speaker, I move and ask unanimous consent that the roll call vote on the passage of the bill be considered the roll call vote on the effective date clause. Hearing no objection, the effective date clause has been adopted. Madam Clerk, please read the next item on today's calendar.

House Bill number 388 by the House Finance Committee entitled An Act Relating to Loans Made from the Bulk Fuel Loan Account and Providing for an Effective Date. The Finance Committee considered the bill, recommends it be replaced with committee substitute for House Bill 388 Finance with the same title, attached one new zero fiscal note and one new indeterminate fiscal note. Signing the report do pass, Representatives Jimmy, Hannon, Galvin, Bynum, and co-chairs Josephson, Schrage, and Foster. No recommendation. Staff, Allard, Tomaszewski, and Moore.

I have one committee substitute. Mr. Majority Leader. Mr. Speaker, I move and ask unanimous consent that the Finance Committee substitute for House Bill 388 be adopted in lieu of the original bill. Hearing no objections, so moved.

Madam Clerk, are there any amendments? I have no amendments, Mr. Speaker. Mr. Majority Leader. Mr. Speaker, I move and ask unanimous consent that the Finance Committee substitute for House Bill 388 be considered engrossed, advanced to 3rd reading, and placed on final passage.

Hearing no objections, so ordered. Madam Clerk, please read the title for the 3rd and final time. Committee Substitute for House Bill 388, Finance, by the House Finance Committee, entitled An Act Relating to Loans Made from the Bulk Fuel Loan Account and Providing for an Effective Date. Representative Foster. Thank you, Mr. Speaker.

What's for us is the Bulk Fuel Loan Program that small communities with a population of under 2,000 people use to buy heating oil, diesel, propane, and gasoline. House Bill 388 raises the cap on bulk fuel loans from $750,000 to $1.5 million, and this is to address the soaring prices for energy. Uh, the other thing that this bill does is it raises the cap when 2 or more communities pool their fuel orders. Currently the cap is $1.8 million, and this bill increases that so that the new cap would be $1.5 million times however many communities there are that are pooling. So for example, you might have 2 or 3 communities that are very close on the Yukon, and they want to pull their fuel order together.

And this would allow for an increased cap. It's a pretty simple bill. Pretty much that's all it does. These loans would have to be paid back, and currently their default rate is only 0.5%. This is lower than the default rate on conventional loans, which typically is around 2.6%.

And so in a nutshell, that's all the bill does. And I'm available for questions. Representative Jimmy. Hwai'ana, Mr. Speaker, permission to read. Permission granted.

Hwai'ana. When I was first elected, I made my one trip back home to my region at the end of March. I was visiting a village close to Bethel. Looking for the tribal office, I stopped into anybody's house to ask for directions. When I opened the door and walked in, the lady was warming her house with her oven.

She didn't have enough money to buy fuel. And her kids were there sitting on the couch all bundled up wearing their winter clothes. This was before the war. Before the latest price spikes. Before the coldest winter the YK Delta has seen in 15 years.

That was just a regular day. I think about what it costs to keep an oven running as you heat— as a heat source.

She was not cooking that day because the oven was busy keeping her children warm. Now we have an overseas war that has been good for the state's revenue, but that same war is squeezing global fuel markets. And those prices flow straight to my communities with nothing in between. You pay for what the barge brings in. Last winter was the coldest snap in 15 years, as I said earlier.

Families had no choice but to burn through fuel faster than anyone planned for, and prices are not coming down. Anyone telling you different is not looking at the same world as I am. The bulk fuel revolving loan program exists for exactly this moment. But the caps have not kept up with what the fuel actually costs. If we do not raise them, communities hit the ceiling before they can fill their tanks.

This bill does not solve energy crisis in rural area. I wish it did.

What it does make sure is that when a community in my district asks for a loan to get through the winter, the program can say yes at a number, and that means something. When we have an establishment program with over 99% repayment rate, we just need the cap to reflect the reality. I urge your vote. Representative McCabe. Thank you, Mr. Speaker.

I'm going to support this bill. I will tell you that in the aviation industry, in the big, big freighter long-haul 747s that I used to fly, we had a phrase that it takes fuel to carry fuel. That means that the more fuel you put in the tanks, the more fuel you're going to burn to carry that fuel, which was a safety net for a lot of us. Much like it's a safety net in the villages. It takes fuel on barges.

It takes time to get fuel there, Mr. Speaker. And, um, that's why this big expense, that's why we're having to do this right now. But, Mr. Speaker, I have a bigger dream. I have a dream where we could actually truck fuel from Anchorage or from the valley to McGrath and to the Kuskokwim. Mr. Speaker, the West Susitna Access could be a start of that, and I appreciate the opportunity to tell you that.

Representative McCabe, I almost said you omitted a couple of other points in your— here. Representative Holland. Great. Thank you, Mr. Speaker. I rise to support this bill.

The House Energy Committee on April 23rd had a chance to listen to and hear from people in the communities and that are serving the bulk fuel needs, including the fuel companies that supply this, and they helped raise the urgency and also the timeliness of this, um, need to increase the cap. It's important to recognize that we not only are, um, faced with a significant increase in the cost of fuel, but also there's uncertainty around the availability of the fuel given the fuel crisis and the source of where this fuel comes from. The timeliness of this is important because these communities need to be making commitments now to be able to secure their supply that will not be delivered until later this summer or early this fall. But in securing that supply, they have the responsibility to be able to pay for that fuel up front ahead of when they will actually be generating the revenue from this fuel through sales and through utility rates. So this is a timely bill.

It's important, and it responds to a crisis that our communities are facing now in a responsible way. And I'm proud that our work here has been able to, you know, lend some small amount of important support to this effort. I would also like to note, though, that the program, while being a loan and getting paid back, also, though, represents an urgent concern for us to understand that this high fuel cost will be taking money out of these communities. And while this loan program will help them bridge the cash flow needed to be able to buy the fuel now and recover, you know, later, This also, though, represents money that is coming out of the community that may have been used to buy food, may have been used to be able to pay for housing and other utilities. And there's a crisis of, you know, what I think we heard was about $400 million of additional fuel expense that they're going to have to pay.

That's $400 million that will be coming out of these communities that will mean something is not getting paid for. So while I'm proud that we're able to— provide this support and this additional flexibility in the loan program, I urge us to also understand that this challenge will ripple on in the years as fuel comes in and as the rates are readjusted and the cost of this fuel is passed on to the people that are using it. So I do support this bill. I urge us to continue to listen to and be responsive, as we are now, to the needs that will be developing in the future. Thank you.

Representative Mears. Thank you, Mr. Speaker. I want to echo some of the concerns and thoughts of those before me. I really appreciate the expediency in which the legislature is addressing this issue. Although high oil prices do affect our ability to do some things, it also really, as a— in our state budget, it also is squeezing Alaskans.

So this is one way to help bridge some cash flow issues to allow communities to be more efficient with making sure they have fuel and to collaborate. But again, it's one small step in things that we need to be considering for energy issues and recognizing that there's going to be a lot of impacts to folks over the next few months. Thank you. Representative Bynum. Thank you, Mr. Speaker.

I rise in support of HB 388. This bill is a demonstration of what happens when we get together and we work together. This came into committee quick for us in Finance. It was— it turned out to be very complex, and we worked together to find a solution, and this demonstrates that. Appreciate everybody that pulled together in a very tight time frame to actually achieve something that I think is going to be good for Alaska.

Thank you, Mr. Speaker. Any wrap-up comments, Representative Foster? Seeing none, are you ready for the question? The question being, shall committee substitute for House Bill 388 finance pass the House? Members may proceed to vote.

Will the clerk please lock the roll? Does any member wish to change his or her vote? Will the clerk please call the roll. Madam Clerk, please announce the vote. 39 Yeas, 0 nays.

With a vote of 39 yeas to 0 nays, House Bill 388 has passed the House. Mr. Majority Leader. Mr. Speaker, I move and ask unanimous consent that the roll call vote on the passage of the bill be considered the roll call vote on the effective date clause. Hearing no objection, the effective date clause has been adopted.

Madam Clerk, please read the next item on today's calendar. Committee substitute for Senate Bill 143, Community and Regional Affairs by the Senate Community and Regional Affairs Committee entitled An Act Relating to the Terms of Office of Municipal School Board Members Relating to the Size of the City Council and Second Class Cities and Providing for an Effective Date. The Education Committee considered the bill, attached one previously published zero fiscal note and one new zero fiscal note. Signing the report do pass: Representatives Underwood, Eichide, Schwanke, Dybert, Elam, and co-chairs Story and Hemmschulte. I have no House committee substitutes.

Madam Clerk, are there any amendments? Amendment number 1 by Representative Kahlom, beginning page 1, line 1. Representative Kahlom. I move. Amendment 1.

There's an objection. All right, so Amendment 1, although it's long, really the heart of the amendment is on page 4. It's calling for DEED to provide ethics and budget training ethics training for school board members. When I first got in the legislature, I was required to do ethics training, and thankfully I got some budget training too. A lot of the school board members, especially if you just get on a board, you may not have budgeting experience.

You may not know what the ethics rules are. A lot of times.

People get in trouble because they didn't know. It's not that they're doing something nefarious, but if you don't know the rules, how do you know whether you're breaking them? So this amendment is trying to stabilize kind of the training for ethics and budget, ethics and budget for all school board members. It calls for them to do it within 30 days of getting elected, but it doesn't ban current board members board members from taking the training. I wanted it to come from DEED because what I have found when I had asked different— because there's been— there's school board members here, or people have been on school boards.

Some districts do have some kind of quasi-training around budget and ethics. I think the School Board Association offers some training. I wanted it to be consistent. And I know that there's a lot, there's been a lot of issues in a lot of districts with school board members maybe not understanding budgeting as much as they should. If you don't come from a financial background, it is very overwhelming to take on a budget, especially for my school district, is a very large budget.

So this is just to help school board members be supported and have the training they need to do their job on the school board.

Representative Moore. Thank you, Mr. Speaker. Amendment number 1 is a friendly amendment, and we urge a yes vote. Thank you. Representative Hannan.

Thank you, Mr. Speaker. I rise with a couple questions to the maker of the amendment, and philosophically I'm supportive of the amendment. The ethics act that applies to us is specified in statute. Our training is specified, um, and it's dictated. It would not be the same ethics training.

So my question for the maker of the amendment is, is there an executive branch local government ethics requirement training that already exists, or is the Department of Education to develop a training after interpreting law that they believe applies just to school boards, or is there one that applies to local government? Additionally, right now it's phrased ethics and budget training, and I'm curious as to, again, with the construct of budget training for school boards, local school boards vary in legal responsibilities from REAA school boards to municipal school boards, and whether there is already an existing training that would be simply administered through DEED, or is DEED to develop one? And if in both cases of DEED having to develop these, whether there is a fiscal note anticipated to do those. But philosophically, I certainly support and believe, as the maker asserted, many people get into trouble with ethics violations when they first become elected because they're ignorant to the laws that apply to them. But I am very ignorant to how— what ethics laws apply to school boards besides the Open Meeting Act.

So thank you, Mr. Speaker.

Representative Story. Thank you, Mr. Speaker. I rise with, uh, for a question with the amendment sponsor, to the amendment sponsor. I know that our School Boards Association does provide budget and ethics training I know many times it's something the district pays for. So I'm wondering if there's a fiscal note, if this would get a fiscal note, because DEED would all of a sudden have to have the capacity to give training on budget and ethics, and I do not know if they have that training.

Thank you. Representative Stutes. Thank you, Mr. Speaker. Just a moment before wrap-up, I would like to remove my objection. The objection has been removed.

We do have a couple— another objection has been registered.

Representative Hemmschutz.

Thank you, Mr. Speaker. Without a committee process, I'm torn on this amendment because of course the goal of the amendment I think we all support. The question is what's already available? Is there a code of ethics that exists? Because a code of ethics is written for the specific environment that it's, I guess, governing over.

So teachers have a code of ethics, and every teacher contract says that we will abide by those. And then it's your job as the teacher to make sure you know what those standards are. So I have questions about it. It's not that I disagree with what's trying to be done here, but is this an online training? What happens if you don't take the training?

There's a lot that would be worked out in a committee process. I know people are tired of hearing that. So philosophically, I don't disagree, but I'm not sure how I'll vote on this just because there's a lot there behind the words that are on the page. Thank you. Representative Stapp.

Yeah, thank you, Mr. Speaker. I'm going to rise in support of the amendment. I don't quite understand, kind of guess what the hubbub is. It's pretty straightforward amendment. I would say we should probably have— provide our school board members with budget and ethics training, especially if you've been reading the paper the last couple years, Mr. Speaker.

Good amendment. Thanks.

Representative Sadler. Yeah, Mr. Speaker, I rise in support of this amendment. You know, when citizens are willing to step up and serve the Republic in some challenging roles that have a lot of statutory and ethical considerations, it's only fair that they be equipped with the tools and the knowledge they need to stay inside their lanes. I think it's frustrating for people— we hear news of new local government officials individual school board members who run, serve, and then 6 months later throw their hands up saying, I cannot deal with this morass. A little bit of prevention, a little bit of education at the front end will go a long way towards improving their service and getting people to invest in long-term careers.

I, for the life of me, can't— I support this bill and hope others will as well. Representative Freer. Thank you, Mr. Speaker. As a former school board member former school board president and former member of the AASB board of directors, I can say that there is model training for ethics, and I think that it would be— it's very valuable. I was a new school board member at one point, didn't have training on— well, I was the director of HR before, so I did have experience with the budget, but there are some folks that join school boards for the very first time.

They don't have the experience, and I think that this is A good amendment, and I support it. Thank you. Brief it is.

Will the House please come back to order?

The objection. Has been removed at this point. Is there further objection? Seeing none, Amendment Number 1 has been adopted. Madam Clerk, Amendment Number 2 by Representative Bynum, beginning page 1, line 1.

Representative Bynum. Thank you, Mr. Speaker. I move Amendment Number 2. There's an objection. Thank you, Mr. Speaker.

What Amendment 2 does is that it provides an opportunity for DEED to be able to assist in financial matters when it comes to a school district. Fiscal management, permission to read? Permission granted. Thank you, Mr. Speaker. In the amendment under Section 2, fiscal management of the school district is effective and responsible.

This is one of the things that DEED can assist with to help the school district when, when they are faltering in their financial matters. So the measures necessary to correct fiscal management deficiencies at the school district is on line 12, and then implementing corrective measures is on line 17, and an obligation for the school district to submit a balanced budget. Mr. Speaker, I'm bringing this amendment forward I did speak with the bill sponsor, and he did like the amendment. I'm bringing this forward because there are times when our school districts have issues with their budgets and how they're balanced, dealing with presenting their budgets and making sure there's a balanced budget. And when those issues arise and there's a concern from the district or a concern from the school board or concern from the borough or city and they reach out to DEED for assistance and help, many times the response they get is there isn't anything in law that allows us to intervene.

And so that's why I'm bringing this forward. As you know, Mr. Speaker, in my district, this is a major issue. It is a catastrophic issue, actually, and it has been in the making for years and nobody has intervened. Nobody has stepped in and nobody has helped. So I'm hoping, I'm praying that this amendment.

Amendment will help solve that problem and encourage our Department of Education to step in and assist when necessary to help our districts from financial ruin.

Representative Moore. Thank you, Mr. Speaker. Amendment number 2 is a friendly amendment. The maker of the bill from the other body is in agreement with it. So thank you.

Representative Pawlent. Thank you, Mr. Speaker. I rise, I think, in some concern, perhaps opposition to Amendment No. 2. I want to raise a couple concerns, perhaps in wrap-up we can come back to this.

First off, the amendment as I read it is asking for the department to determine what is effective and responsible. I don't see that this is very well defined. I think we have all been aware that the Concerns around our schools and the way the schools have been performing has raised a lot of concern, and this vague language around effective and responsible to me creates a very uncertain landscape for the department to have the basis to be able to determine that a district is deficient simply because of perhaps coming to its own determination that there's some question about effectiveness and responsibility, and I don't think this is the way to develop that rubric or to create that landscape The second concern is at the bottom of the amendment where it asks for a balanced budget. I certainly believe that we all seek for balanced budgets, but we all recognize that balanced budgets are in the eye of the beholder depending upon when we have surpluses and deficits and how we address the different changes in expected and planned cash flow. Certainly it has been the case that a lot of the one-time funding out of the legislature has created some financial challenges for districts that may receive one-time funding within days of starting the school district year, and their ability to use that funding responsibly, given the late timing of our authorizing it, has made it difficult for them.

So I don't think that this amendment is quite on mark with what we should be looking for in terms of responsible and balanced budgeting. I appreciate the intent, but I don't think it's appropriate to bring into this bill right now. Thank you. Representative Sadler. Thank you.

I rise in support of this amendment. You know, in recent years, I have been stunned, as many Alaskans have been, to read in the papers or hear from their neighbors about significant financial challenges in school districts, not only in my home district of Anchorage, but in the capital city school district in which we're now residing. I think it's— we have school boards who are trying to make decisions, and they don't always make the best decisions financially. And it's to their benefit and to ours as representatives of the people that those errors be captured quickly and corrected quickly. You know, it's just been stunning to hear, you know, surprise, there's $10, $20, $30 million deficit.

And that sets everyone on Twitter and makes crisis financial decisions necessary. Early corrections will help the finances of our school districts work more smoothly. Early course corrections are always better than late ones. This is a responsible thing to do. Deed has responsibility for statewide education.

This is a real common sense thing to do. Representative Hannan.

Thank you, Mr. Speaker. I stand in opposition to this amendment. For the overreaching responsibilities that it gives to an appointed commissioner at the Department of Education. All of our school districts, 53 of them, have elected school boards. Now, I have no problem with assuring that we have oversight of our school boards and correction when, uh, there are financial problems.

But to give them to a commissioner, uh, who may or may not have financial expertise. The requirements to be the Commissioner of Education require a superintendency certificate. Um, they do not require you to have an extensive background in financial management. And so to place the Department of Education as the overseer of 53 elected school boards, if there's an error, I think is the wrong place. And I think, uh, if we are so sure that we need secondary audit level review of all of our school districts, then we need to look at a state auditor position and financial oversight.

But to place that at the Commissioner of Department of Education and say that they have the authority to place districts on, um, correct financial management, I think is a really inappropriate placement for the authority that we are seeking. And so I must oppose this amendment. Representative Vance.

I'm going to respectfully disagree with the previous comments. Our Constitution says we shall provide for public education. We have a commissioner of the Department of Education that is supposed to oversee those funds. It's, it's been apparent in the last couple years our school districts need help making sure that people have not omitted some zeros. Mistakes happen.

I, if I'm not mistaken, I think the Department of Education has hundreds of employees. If they're not for helping the school districts by providing financial audits to help make corrective measures and help them balance a budget, what are they there for? I've often asked this question. The entire Department of Education on the state level should be to assist our school districts with this very thing. This isn't talking about punishing them.

This is saying, hey, we found a problem, let's help you fix it so that it doesn't create a bigger problem in the future. This is what I hope that our, our Department of Education is doing currently. We have school boards that are taking on a variety of of issues every day. I think having another eye to take a look at the budgets and help them pass a responsible balanced budget like we are instructed to do here is a responsible move. This is something that, that I hear from my community the most.

As we've seen, a lot of our school districts have massive debt and people are going, how did this happen? How did we get to this place? Place. It's because we didn't have something like this in place that offers assistance to them before it grows into a larger issue. And also saying you're going to have to have a balanced budget and you need to figure out one way or another.

Same issue that we're facing, Mr. Speaker, but it also aligns it with reality. And I think it helps our communities keep up with the realities that our school boards are facing right now. I'm seeing that there's a big gap in that communication. Our school boards are having to make hard decisions right now, and parents are pushing back against that because they haven't seen the financial reality that many of our school board members have been looking at for quite some time. This gives them the assistance from the department through the authority of the commissioner to help make those corrective actions ahead of time before it becomes a problem.

And so I am in strong support of this. Representative Stapp.

Thank you, Mr. Speaker. I rise in strong support of the amendment. Amendment does two things, Mr. Speaker, and they are two very common sense things. There's an old saying, he who pays the piper calls the tune, Mr. Speaker. The bulk of the funding for these school districts comes from the state.

The fact that we would ask them, which should be actually pretty simply already embedded in most their statutes, to actually submit and maintain a balanced budget is something that we in this body have to do. And because we fund these schools it's a little sad that we would actually have to put that in statute because they already should be maintaining a balanced budget, Mr. Speaker. But the second thing with reviewing the audit, there's a long list of things that we could talk about of why this is a good amendment, Mr. Speaker. We could talk about Juneau School forgetting their superintendent's salary. We can talk about surplus in the Fairbanks School District because they didn't account for benefits.

We could talk about a disaster in Ketchikan School District for accounting. We can do the laundry list, Mr. Speaker. This is a good amendment because clearly when you go school by school by school, you find that they got a ton of problems with being able to look at and review their own audits. And this just says the Department of Education, which we also fund, Mr. Speaker, is going to say, hey guys, maybe we should kind of help you figure this out so we don't— we avoid another terribly embarrassing report about a school district who can't balance their budget and forgot where their money went. Mr. Speaker, it's a good amendment.

It adds accountability to school districts and It tells every school district across the state that, hey, from the Department of Education, help is on the way. We don't want these things to keep happening, so we're going to ask that we assist you in ensuring that your focus at the district level is actually educating the kids and not financial disaster. Thank you, Mr. Speaker.

Representative Schwacke. Thank you, Mr. Speaker. I rise in support of this amendment. I really appreciate the, the maker bringing it forward. I don't think that this would add a tremendous amount of work for the commissioner's office.

Specifically, they have a division, Division of Finance and Facilities. So they have tremendous expertise in school finance. So as a school board member, I wanna describe the situation.

That I found myself in. I did have budget and ethics training the very first year when I joined the school board, but I was taking in things like a waterfall, like, like we do here in this job, and I wasn't still 100% sure what the budget process looked like until I got into it years down the line. And when it comes to the budget that our school finance financial finance professionals focus on, they focus on the state portion of the budget. And most school board members actually don't even realize that that's only a portion of the budget. So in my case, our really small little school district had a $7.5 million budget that was directly from state funding.

And that's what our school finance team really focused on when they presented budget numbers to the school board for the first several months of school board meetings throughout the year. And somewhere along the way, we caught wind of some $9.5 million budget number. And some of us newer school board members started asking questions. And it turns out that there was an extra $2 million floating around our budget that came from grant funding. And when we asked for an entire full budget, full revenue, full expense, The finance officer, she was very new and she basically said, don't bother me with that right now.

I'm really focused on getting my state budget approved by DEED. So we went several months without seeing a fully balanced budget because those dollars, those grant dollars were not overseen at all by DEED. So by adding this into the bill today, I think we we really help out, especially some of these rural school board members, with the understanding that DEED will be looking at the entire school district budget, making sure that the grant dollars that are coming into these districts are actually penciling out and ensuring that we have balanced budgets. So I appreciate the amendment, and I encourage everybody to vote for it. Thanks.

Representative Story. Thank you, Mr. Speaker. I appreciate too that everyone is very concerned about our school boards and that the, um, that they're doing, understanding their budget work, and they're balancing the budgets. What they do every year is they are required to have a balanced budget. You have to have a balanced budget, so that is required.

The other thing that is required is you have to have an audit each year. And so what that entails is many years, um, every year the auditor comes in, spends a couple weeks, depends upon the size of your budget, your school spends time working on the budget, making sure things are accounted for, and it brings up any findings that you might find on your budget. And of course you want no findings, but some of the errors that were found were found before because of the audits. There are procedures in place. I find that we have had a few errors.

When I think of all the years of budgeting and all the district budgeting, some errors have been highlighted that, that we've talked about today. And part of it is we have been cutting back our budget so much, focusing on administration, that a lot, several of those districts found that they had lost staff. I think the same thing is for DEED. They do not have the capacity to do that. I think it is a local control issue, and I urge a no vote.

Mr. Majority Leader. Brief—.

Brief— it is— Will the House please come back to order. Mr. Majority Leader.

Yes, Mr. Speaker. With some reticence, I rise to speak. I usually don't speak on much other than going off the motion work, but I think on this I have to speak just as a former school board member. And this is more a question to the maker of the amendment. So we know every year we have supplemental appropriations bills that come through this body based on unforecast expenses that occurred in the fiscal year we're in.

And they invariably end up with a vote. Often they require a 3/4 vote if it's more money than we have available to pay for those events. So just in thinking this through, how would this affect school boards that have maybe a planned reserve drawdown that they're trying to get? How— if they're in a multi-year recovery plan, maybe, you know, it's a result of a disaster Maybe they have a capital maintenance deferral catch-up, maybe a boiler, a roof, an HVAC system. There could be a state funding delay that they have every right to expect, like all our schools get state aid, but we know what happens down here sometimes.

We get stuck and the school boards have to move forward with adopting a budget in light of some significant unknowns. Also, teacher contracts, when those come up for negotiation, often those aren't resolved immediately. And as I said, the anticipated state appropriations don't always come through. I really like Section 2 of this amendment, everything about the, the audit and the fiscal management and correcting deficiencies. I just want to make sure that we're not putting something on a local school board that we don't do on ourselves, and that somehow this wouldn't preclude the authority of a local school board to respond to these unforeseen things that I mention that are really not their fault.

That's not a spend problem. These are things that are truly— they're structural legal things that come up that they, they have to be able to respond to. So thank you, Mr. Speaker.

At ease.

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Will the House please come back to order? Under debate on Amendment Number 2 to Senate Bill 143.

Representative Carrick.

Thank you, Mr. Speaker. I'm rising in opposition to Amendment Number 2. I understand where the maker of this amendment is coming from with potential concerns, but Mr. Speaker, I'm concerned about a few things here. First, this amendment says that they will have commissioner input where there's a fiscal management deficiency. And Mr. Speaker, I'm not entirely sure if a fiscal management deficiency is meant to be defined in the audit specifically, or if the commissioner determines what that is based on findings of the audit, or based on some other mechanism.

So it's not well defined what that is. Um, secondly, there's no sidebars here on what corrective measures the commissioner may decide to undertake. For example, Could they directly reverse the action of a board that they may have made that led to a potentially unfavorable audit? Are they able to do that? Additionally, for notification, there's no notification timeline listed in here between the completion of an audit and the commissioner notifying a district that corrective action needs to be taken.

So theoretically, that could happen months or outside of the current fiscal year, which would have problematic implications for the district. Third, I'm wondering how much work it creates for a district instead of actually responding to audit findings if they're having to respond to and submit responsive comments to the commissioner regarding a commissioner's inquiry. It seems like being under the existential threat of a commissioner saying they want corrective action taken might be counterintuitive to a district processing the results of an audit and actually implementing changes. And finally, uh, Mr. Speaker, I'm really concerned about this amendment because I think it's a usurpation of local control, uh, unintentionally perhaps, but the Commissioner of Education is ultimately a political appointee. They are tasked with the overall guidance and direction of our education system in the state.

They are not involved in the day-to-day mechanisms and decision-making of school boards. And I don't think that our duly elected school board members at the local level should have this additional mechanism where the commissioner can come in and potentially usurp their authority. So for those reasons, I oppose Amendment Number 2.

Representative Prox.

Thank you, Mr. Speaker. I rise in support of Amendment Number 2. The expectation is that the state funds education. It's one of our biggest budget items. It's a very important item, I get that.

But— and there might be some details that need to be fleshed out in the future for the Commissioner of Education, really the State Department of Education, I think the concerns over a particular person doing it or thinking that the commissioner is going to be the only one involved in the process, that concern is probably overstated. We just do need to have more financial transparency at our level, and this would help in that, and it might help some school districts that have inexperienced board members or administration or whatever, but we can help get better control and transparency over money spent towards education, and I think the public would appreciate that. So I support Amendment 2. Representative Nelson. Thank you, Mr. Speaker.

I rise in support of Amendment 2, and the language is pretty clear in this amendment. And it is not overly prescriptive, yet the idea is clear. And to quote the member from up north, he who pays the piper calls the tune.

I mean, if we're going to start, it's not overly prescriptive because the problems in each school district are going to be varied and the solutions are going to be varied. And so to go down that path of I'm afraid that we're going to be overstepping our bounds, I think is an unfounded one. I think this is good legislation that gives us oversight, that provides help where needed, and where it's not, it won't be necessary. But I think this is a good amendment. It's clear language in its intent, and I would— on the other side, I don't think that we need to get too prescriptive, and we need to trust the people that— I mean, we're the ones that actually end up appointing that time after time, and that's the person, the commissioner.

It's their job. To oversee these things. They're already doing these things. They have an entire department that we fund as well. So this is a good, simple amendment.

It's good legislation, and I think it will aid in responsibility. So I urge a yes vote. Representative McCabe. Thank you, Mr. Speaker. Permission to read?

Permission granted. So, Mr. Speaker, in this amendment it says the commissioner shall— it says the commissioner may then implement. It also then says the commissioner shall notify the school district, and then it said the school district may within 15 days receive, submit responsive comments or evidence, and then it says the commissioner shall. So we're not doing anything prescriptive to the school districts. What we're doing is clearly telling the commissioner, who essentially gets money and gets their direction from us, that the commissioner shall do something.

The school boards may do something else. So I don't think this, at least in Section 2, is overly prescriptive. The Section 3, the balanced budget, I think is common sense. I think most boroughs probably require that anyways. But this to me is just really common sense language that's not overly prescriptive, which we tend to do.

But I also think we really need to consider who is offering this amendment and the issues that have been in the news with that school district and understand that this.

Is possibly a little bit of a cry for help. Thank you, Mr. Speaker. Representative Hemmschulte.

Thank you, Mr. Speaker. I'm going to ask the indulgence of the body because I have a whole lot to say right now, so I'll do my best to keep this as tight as I can. Um, we authorize school boards on our behalf to take care of the children of their community. To solve the problems in their community and to create the future for their community that they want to create. And they do that locally.

They do that on our behalf. So the funding may come from us, but it is not our decision how it is spent in the local school district. That is not our decision, and it is not our role. Now, should it be spent with efficiency? Should it be spent carefully?

100%. Those are public dollars. They belong to all of us. I want to offer some perspective. If parents are unhappy with school boards right now, it may have to do with 10 years of flat funding.

It may have to do with the fact that school boards are having to make impossible decisions to take one thing from one kid in order to give it to another. No school board wants to make that decision, and that is what they're being asked to do. So if their budgets are a little off, forgive me, It's really hard to make the best decision you can to keep as many programs going as you can in the face of a budget that you cannot work with. So mistakes have been made. On top of that, many members of this body have required that we decrease the amount of administration.

So the war on administration results in fewer people in administration to make sure that the supports are there for administration to do its job of the fiscal responsibility of a school district.

I'd love to give Deed more to do. Maybe we should look at which department in our state operations, which department has taken the greatest decrease in the number of PCNs. You will find that is the Department of Education. So be very careful what you ask for when you also decrease the number of people available to do the job you're asking them to do.

In statutes right now, a school board can ask for help. I'm not sure if it's in statute. We know that they can ask for help if they need it.

People want to know what is DEED doing. I can help you with that. With the few folks who are left at DEED, they're managing all of the federal programs. That means child nutrition. That means support for kids in Title I schools.

It means support for kids learning English. It means support for kids with special needs. It means support for gifted kids. All of that's happening indeed. Don't forget they need to certify teachers.

Don't forget that they also need to make sure that the standards the teachers are working to are correct and current. Don't forget that they need to oversee curriculum. Well, let's not forget testing. Most of our kids test. There's a whole lot going on at DEED.

What are they not doing? With all due respect to our good people at DEED, there's not a whole lot of innovation. You know why not? They don't have the people to do it. So right now, if a school board is saying, hey, we're really struggling and we need help, they can reach out, and I'm absolutely certain that the people at DEED will help them.

I want to be really careful to be very clear what this amendment says. Specifically, the commissioner may implement corrective measures. To a hammer, everything's a nail. So is that really the path that we want to go down, of saying you may? When does that become something the commissioner chooses to do because now the commissioner has authority?

We need to keep the authority with the local school boards. I oppose this amendment.

Representative Ruffridge. Yeah, thank you, Mr. Speaker. Permission to read briefly? Permission granted. Thank you.

So the way I read Amendment Number 2 seeks to amend AS 14-14-050 with a new letter, letter E. And some of the questions I'm hearing in debate against The amendment has to do with giving the commissioners some authority over this audit. Letter A in that section says the school board in each school district shall provide for an audit of all school accounts. Where does that audit go? One certified copy of the audit shall be filed with the commissioner and one with the public. Letter B, the audit shall conform, inform to requirements established by who?

The commissioner. Then what else is the commissioner supposed to do? Withhold all payments from state funds after November 15th if a school district fails to file a certified copy with the department. Letter C, the commissioner may provide for a reaudit or audit check in the— if the commissioner's judgment is that it's necessary to substantiate reported expenditures. I think the commissioner is given a lot of latitude in statute already.

And this statute is seeking to be amended by saying then the commissioner shall just review the audit that the commissioner already has been given under letter A and then assess whether that school district is being effective and responsible in their fiscal management. I actually would hope, as many members have said, that this amendment wouldn't actually be necessary, but I think the evidence of the last couple of years in certain cases makes it somewhat necessary. And then having a corrective action to correct those fiscal management deficiencies is actually just saying we're going to provide some help to make sure that we have those corrective measures in place. The speaker before me actually mentioned a whole bunch of things that are issues that have been longstanding and ones that we as a body have sought to correct, but it is certainly a long battle that we are having ahead of us. And in the, in the meantime, I think in that statute, if we have a requirement to audit them, and the commissioner is the one receiving an audit, then the commissioner should also be able to say, well, I think there are some measures that we need to take to help correct these actions and, and be able to implement those if they're already given the authority to do so many other things.

Maybe that authority, from what I can tell in that statute, is simply just withholding funds. This actually grants maybe authority that's a little less Well, I guess decisive. Maybe there's some middle ground in there somewhere. I think this amendment would help grant that authority and might help us on a smoother path to corrective action if it's needed, and I'll be in support of Amendment 2.

Representative Josephson. Mr. Speaker, I wasn't going to speak because we have so much work to do today and in the next 7 days. I'm not sure if the body is aware that if you ask our top budget officials in the state at OMB, at Ledge Finance, and at Audit whether our books are balanced in FY25 and whether we've repaid the Higher Education Investment Fund, there's a dispute. There's a dispute. Our best minds can't agree on whether we've repaid the Higher Education Investment Fund.

So my concern here is that the amendment— I don't like the direction this is going. It's patronizing. It reads in a patronizing way that the school board is second class, and, and I just think the state needs to get its own house in order a little bit on some of these key issues before we tell the school boards what to do. I oppose the amendment.

Representative Johnson. Thank you, Mr. Speaker. I just want to speak briefly in favor of this amendment, just that we, we have a responsibility as we dispense our monies to have some oversight, not, not trying to get involved with local control, but being aware of what the accounts are. And as far as whether the higher ed fund is been repaid or not, that's really a political issue, not a financial issue. And while I recognize that finances get caught up in politics, let's not let this get involved in politics.

Let's just try to do what we can to get the education funded the right way and the way it should be. Thanks.

Brief at ease.

Will the House please come back to order? Representative Fields.

Thank you, Mr. Speaker. I strongly oppose this amendment. The fact that the school districts are trying to write a budget in the midst of us writing.

Our budget and they are counting on an undefined amount of money from us that they only realize after they do their budget makes this impossible to implement. I also want to note, and the way the amendment is written is we would be putting into law that the commissioner would determine what is effective and responsible. Well, I can't imagine more subjective terms. They're neither defined in statute nor are they, nor are they possible to define. In this context.

In addition, there's significant ambiguity around what year are we looking at— calendar year, are we looking at a fiscal year, are we looking at a balanced budget from the date that the state budget is signed into law, are we looking at a balanced budget in terms of the school year's budget? It's totally impossible, and it, it does drive me crazy that we have— or continue to unconstitutionally underfund schools, but then we think we should go micromanage how school districts manage the insufficient amount of funds, which is in fact our fault. I just hate that kind of micromanagement, and we'll vote no. Representative Elam. Thank you, Mr. Speaker.

I rise in support of this amendment. It's been an interesting dialogue, uh, listening and observing everybody's perspective on all of this. My school district has an obligation to present to the assembly, which I was on the assembly for a while, They have an obligation to present a balanced budget, but we enforce that at the local level. What I've been really surprised to hear is how many districts don't do that, that they don't have an ordinance in place requiring a balanced budget. I would say that, you know, to the, the comments about the state being the obligation of, of everything, well, there's also a local contribution, there's also a federal contribution, there's a lot of other grants that happen.

If, if the budgeting process is too complex, I would highly recommend simplifying it. I was actually really surprised whenever I found out that here it was impossible to find out how much money we have in the general fund. I would just recommend asking everybody to go find out how much do we have in our own account. You can't find that information half the time. So yes, if, if this leads to simpler budgeting and easier processes for people to understand, I'm absolutely in support of it.

Thank you.

In wrap-up, Representative Bynum. Thank you, Mr. Speaker. I did not realize that this would be such a contentious issue.

I gotta tell ya. But I did want to answer some of the questions that I'd heard through the comments. To the member from District 4, there was this concern about Dede doing an audit, and I would point to Alaska Statute 14-14-050A, which says that the annual audit is to be done by a public accountant who has no personal interest, direct or indirect, in the financial affairs or the fiscal affairs of the district. And that requirement in statute is that the district go hire the auditor, not the department. So I think the concern about whether or not DEED has the ability to do the audits should be alleviated that we already have in statute that the districts are to do those.

Representative from District 10, our majority leader, had brought up some good questions about the school district having the ability to do a budget. And one of the things that this doesn't say is this doesn't say that a school district cannot use their fund balance to create a balanced budget. It also doesn't say that a school district can't provide a supplemental budget. It doesn't say that, that their budget must stay fully funded if there's a shortfall of some kind. That's why they would do a supplemental.

What it says is that when they present their budget, that it must be balanced. And I think that's an expectation that our borough assemblies have, that most of our school boards would have, that the school district present a balanced budget. Things change, funding sources change. We understand that, and that's why we have a supplemental budget process, just as we do here in this legislature and in the state of Alaska. Representative from District 13, co-chair of Finance, said that this says adopt and— I'm sorry, had a concern about balanced budgets.

All of this is saying is that the school districts must adopt and maintain a balanced budget. It's very straightforward. I think it's a very— reasonable expectation, and I'll tell you why in a moment, Mr. Speaker, on why I believe that and the consequences of what happens in a school district when it doesn't happen. Representative from District 35, uh, Fairbanks, had indicated that the commissioner is a political appointee. Well, Alaska Statute 14-07-145 defines how the commissioner is selected, and it is not selected The commissioner is not selected, Mr. Speaker, by the governor.

Correction, the administration.

The commissioner is selected by the state school board, and the state school board is selected and confirmed. We confirm them here. We confirm them, Mr. Speaker. The commissioner is to be a nonpartisan position, so it is not a political appointee. They do serve at the pleasure of the governor, meaning that they can be removed.

The representative from District 2 had mentioned the fact this being a war on administration. My amendment is not intended to be a war on the administration. This is an amendment to tell DEED to intervene when necessary to help our school districts, to help them, not hurt them. Representative from District 7 had mentioned the statute and listed all the items A through D, which give the commissioner lots of authority.

Member from District 2 also said minor, a little off in the budget. I would contend to you, Mr. Speaker, that in my school district being $9.5 million off is not a little bit off. Being off by $9.5 million, Mr. Speaker, puts the future of my kids in my district at risk. It puts teachers' jobs at risk. And the solution that we have in statute now is, is that, is, is that the deed is going to say you were over budget by $3.5 million, Mr. Speaker, and they say they're going to take that money and by statute away from my school district next year.

How many teachers is that? How many kids are harmed in the classroom by that? Because we, we could see a problem happening and nobody intervened. If the school district won't intervene for their own budgets, the school board won't intervene for their own budgets, when people are asking for help and the, and the department tells us they can't intervene to help because it's not law?

What are we doing? What are we doing here? I urge everybody, when you vote, if you vote no on this, take a few moments of your day, contact my district, contact my borough, and ask them what they think about this amendment. Ask them what they think about the legislature and the Department of Education administering education in the state. Ask my community members what they think about it.

My community, Mr. Speaker, is very upset. We are in crisis and we're asking for help, and I'm being told there is no help. I'm being told, Mr. Speaker, that the Department of Education in this state is not capable of administering the system in which we give them $1.5+ billion for. $1.5 Billion, Mr. Speaker, and we're saying that our commissioner and our Department of Education is un— not capable of administering that? Mr. Speaker, I've only been here for— I've been here for less than 2 years.

The system we have in place now was going on well before I got here, and I'm just now hearing in this body people saying, Mr. Speaker, that our system is completely unable unable to manage $1.5 billion to make sure our kids are in the classroom, that teachers are teaching them, and that our schools are functioning like they should, and that they have balanced budgets, and that we have people in the department to intervene and help, and help them. Mr. Speaker, when there's a crisis and I'm being told that I have— I'm bringing a war on the school districts, I'm not bringing a war on the school districts or the administration. I'm saying we need to intervene and help, and this is a measure to help us do that. I urge a yes vote. Are you ready for the question?

The question being, shall Amendment No. 2 Pass the House? Members may proceed to vote.

Will the clerk please lock the roll? Does any member wish to change his or her vote?

Clerk, please announce the vote. 19 Yeas, 20 nays. With a vote of 19 yeas to 20 nays,.

Amendment number 2 has failed to pass. Madam Clerk. Amendment number 3 by Representative Kahlom, beginning page 1, line 2. Representative Kahlom. I move amendment 3.

There's an objection. So amendment 3 basically says, uh, if you have a population of 200,000 or more, that your school board cannot be elected at large. It's saying— it's directing the local municipality that they must have districts and seats in those districts. So I don't know if everybody knows this, but Anchorage is an at-large school board. That means if you want to run for school board in Anchorage, you basically have to have the money and logistics to run for mayor, because you aren't representing one little piece of Anchorage.

It's the whole city, and it's a challenge. If you don't have districts, how do you know that you have equal representation throughout the municipality? You don't. Some school boards may be heavy in Midtown, have more Midtown people. Some might have, you know, more downtown.

It depends on where everybody lives. I don't think it's fair for the schools, um, because Maybe 3 of the school boards live around the same schools. They don't know that community, the community across the way. When's the last time we had somebody from Eagle River or Girdwood on school board? Or Rabbit Creek for that matter?

Mountain View? It doesn't dissect the city. It's outrageous. The representation is not there and we all know it. That's the intent of the amendment because it hurts my heart that Anchorage would do that on their school board, there's no argument to say that that's the best representation.

And we all know it's not. Our assembly has districts. We all have a district. Senators have districts. There's no reason why the Anchorage School Board would be an at-large election.

So that's the intent of the, of the amendment. I would say, um, I've had a lot of conversations with my Anchorage colleagues because this mainly only affects Anchorage. And then I guess the bottom issue is local control. So do we from Juneau say you must, or should Anchorage through an initiative or assembly or whatever say we need districts? And so because there's an issue with the local control, and I think we can maybe work that out, I'm going to withdraw Amendment 3.

Amendment number 3 has been withdrawn. Madam Clerk, are there additional amendments? I have no further amendments, Mr. Speaker. Mr. Majority Leader.

Mr. Speaker, I move and ask unanimous consent that committee substitute for Senate Bill 143, Community and Regional Affairs, be considered as amended, be considered engrossed, advanced to third reading, and placed on final passage. There is an objection. This bill be held to the next day's calendar.

Brief at ease.

Madam Clerk, the next item on today's calendar.

Committee substitute for Senate Bill number 214, Finance, by the Senate Finance Committee, entitled an Act Making Appropriations Including Capital Appropriations, Supplemental Appropriations, and Reappropriations, Making Appropriations to Capitalized Funds, Amending Appropriations, and Providing for an Effective Date. The Finance Committee considered the bill, recommends it be replaced with House Committee Substitute for committee substitute for Senate Bill 214 Finance with the same title. Signing the report do pass: Representatives Jimmy, Galvin, Hannon, Moore, and co-chairs Schragi, Josephson, and Foster. Amend: Tomaszewski, Bynum, and Stapp. There is one House committee substitute.

Mr. Majority Leader. Mr. Speaker, I move and ask unanimous consent that the House Finance Committee substitute for committee substitute for Senate Bill 214 Finance be adopted in lieu of the original bill. Could you speak in your mic, please, Representative Johnson? Thank you, Mr. Speaker.

I would like to object to the CS adoption for 214 Finance and request a summary of changes.

Representative Schraggy.

Thank you, Mr. Speaker. It's my honor to be carrying SB 214, the capital budget, on the floor today. There have been a number of changes made in the House Finance Committee. Permission to read and refer to my notes? Permission granted.

Thank you. So starting with school major maintenance, the House Finance Committee has added $48.4 million, bringing the total to $105 million and funding the top 33 projects on the school major maintenance list. Additionally, for new, new school construction, we have added $6 million for the Dearing K-12 school, complementing the money already in the Senate's budget, uh, for the Stebbins K-12 school, for a total in new school construction of $17.5 million. For university deferred maintenance, we've added $15 million, bringing the total to $32.5 million and funding the top 18 projects across UAA, UAS, and the University of Alaska Fairbanks. For Mount Edgecumbe, we have added $10.3 million to complement the Senate co-chair's previous $14 million investment, bringing the total to $24.3 million.

For workforce development, we have added nearly $10 million, bringing the total workforce package to just under $20 million. To prepare Alaskans for any possible LNG project or other major projects in the state. Key workforce projects include the Fairbanks Pipeline Training Center in the Interior, the Teamsters Construction Driver and CDL Training Center in Mat-Su, Avtech on the Kenai Peninsula, and the UAA Welding Program in Anchorage. For the Don Young Port of Alaska, which so many of our state's goods flow through, we have added $15 million to go towards the cargo cargo terminal replacement, which should help to bring down costs statewide when this project eventually is completed. For tourism and seafood marketing, we have.

Added $2 million each to the Alaska Travel Industry Association and the Alaska Seafood Marketing Institution, bringing both to $6 million total to help buttress those monies and improve upon last year's increments. For court-deferred maintenance, we have added $3.7 million for essential facility repairs. And then we've also added some— excuse me— critical statewide projects based on what we've heard throughout the process. Including $217,000 for the Alaska Library Network, also known as SLED, Literacy and Online Learning Program, $250,000 for AML to support local governments and tribes in federal grant writing and reporting, $100,000 for commissioning activities for the USS Ted Stevens, a great honor which should come to our state this year, $500,000 for the Arctic Winter Games to make sure that we are able to host that important event in the city of Fairbanks in 2 years, and $500,000 for Code Blue EMS, the Code Blue EMS match program supporting rural communities in purchasing ambulances and EMS equipment that is so vital in those communities. Additionally, we've added a waterfall.

If oil prices average $80 per barrel in the first half of fiscal year '27, an additional $26 million would be released It would go towards— $10 million towards the Don Young Port of Alaska to further build on the prior mentioned investment and an additional $10.65 million for school major maintenance, further working down that list, projects 34 through 38. Getting towards the end here, $3.25 million for additional university projects still under that waterfall. Those projects would be at UAS and UAA, building off monies added into the budget last year. And finally, for the Waterfall, $2.05 million for additional court upgrades, specifically around the area of security. Finally, the committee removed receipt authority for two STIP projects which I'd like to highlight, removing $95 million for the West Susitna Access Road and $39.2 million for Cascade Point.

On a high level, the House Finance Committee substitute added nearly $100 million in UGF, bringing the total capital budget to approximately $340 million. $47 Million UGF, more than double last year's, I would note. And it brings the totals to $86.9 million in DGF and $237.8 million in other funds. And finally, $1.814 billion in federal receipts. With that, I think that concludes the changes, and I'd invite any questions.

Thank you, Mr. Speaker.

The objection has been removed.

Objection maintained. Representative Johnson, could you please—. I'm happy to do that. Sorry, Mr. Speaker, I would like to maintain my objection. Objection is maintained.

Are you ready for the question? The question before the body is, shall the Finance Committee substitute for Senate Bill 214 be adopted? Members may proceed to vote.

The clerk, please lock the roll. Does any member wish to change his or her vote? Will the clerk please announce the vote? 23 Ayes, 16 nays. With a vote of 23 ayes to 16 nays, the finance version, finance committee version, Committee substitute of Senate Bill 214 has been adopted.

Madam Clerk, I can't imagine there are any amendments at all. Amendment number 1 by Representative Schragge, beginning page 43, following line 22. Who called the briefities? Representative Stepp, briefities.

Will the House please come back to order. Representative Schragg. I move Amendment Number 1. Amendment Number 1 has been moved. There is an objection.

Mr. Speaker, I move Amendment Number 1 to Amendment Number 1. There's also been an objection registered. All right, thank you, Mr. Speaker. Amendment number 1 would add 1 additional fiscal note to the fiscal— to add to the fiscal notes already in the capital budget. This fiscal note would specifically call out funds necessary to implement Department of Revenue tax system changes should the gas pipeline move forward.

Amendment number 1 to amendment number 1 increases the amount in amendment number 1 from $250,000 to $500,000 based on an updated fiscal note that's been received in the last 48 to 72 hours. So if this amendment were to be accepted and the underlying amendment below that, it would add a total of $500,000 contingent on a gas line bill passing and that moving forward, necessitating upgrades to the DOR tax system. Is the objection maintained?

Yes. Objection has been maintained. You wish to speak to your objection, Representative McCabe?

Representative Sadler. Thank you, Mr. Speaker. I'm going to take this amendment as a vote of confidence and a precursor of the support that a natural gas pipeline bill and eventual project will receive in this body, so I'm encouraged to say this.

Are you ready for the Question? The question be?

Brief at ease.

Will the House please come back to order? We have before the body yet another brief at ease.

Will the House please come back to order. Representative McCabe. Thank you, Mr. Speaker. I remove my objection. So objection to adopting Amendment 1 to Amendment 1, which brings the amended amendment back before the body.

Representative Schwaggy. And I think— thank you, Mr. Speaker. I think I've already spoken to Amendment 1. If there's questions, I'm happy to speak to those. Thank you.

Additional debates, comments, questions? If not, I'm going to bring the matter to a vote. Question before the body is shall Amendment No. 1 As amended pass the House. Members may proceed to vote.

Will the clerk please lock the roll?

Does any member wish to change his or vote? Will the clerk please announce the vote? 38 Yeas, 0 nays. With a vote of 38 yeas to 0 nays, Amendment Number 1, as amended, has passed the body. Madam Clerk.

Amendment Number 2 by Representative Colon, beginning page 2, following line 25. Representative Colon. I move Amendment 2.

There is an objection. All right, so Amendment 2 reallocates $5 million from the Galena project and puts it towards 5 impactful, or sorry, 4 impactful projects in the state. So I think most of you know, but there is a, the other body put $5 million in for the Sidney Huntington School in Galena. We received a letter from the superintendent of that district and said, for full transparency, the district, if they got it, it would be extremely poor utilization of state funding. So when I saw that, what my heart is, is that they would just fund the project.

I don't know why that didn't happen. I think it's like, I think the total project's $35 million, they need $17, something like that. But anyway, so I took that 5 and I'm hoping an amendment down the line we can just fund Galena. But my amendment would put $1 million towards the performance, the Performing Arts Center, which every year I always have an amendment to the capital budget for the PAC. It's very special to me and my family.

All the shows we go to, The Nutcracker, saw Hamilton there, saw a fiddler on there. And so I just have a heart for the PAC, and the PAC has serious building maintenance issues, life and safety issues. And so this would put $1 million towards that project. It would put $1 million $100,000 towards the dome. If you don't know the dome, it's the big fabric bubble in Anchorage.

And it's a 180,000-square-foot indoor facility. And the dome has been important to my family too. They host so many statewide events. I don't know if you have ever gone to the Big C Relays, which I think is called the Russ Edwards Relay now. Takes track team, high school teams from all over the state and does a huge meet for a couple of days.

They've had elite athletes there. UAA track has has trained there. It's an important facility, not just for Anchorage, but for students statewide. It also gives $1.4 million to Denali Family Services to their Wanderlak— Wonderland Project. This is a facility that is trying to be built in Matsu.

And just because it's in the Matsu doesn't mean it doesn't serve kids statewide. It's very near and dear to my heart because it's to house a program for children and adolescents experiencing emotional and behavioral health challenges, including many in foster care or the child welfare, welfare system. We need more beds. We need more spaces for these kids. And as most of you know, I have had a foster care child that I adopted, and he actually did have to go out of state for a time because there was no services here for him.

So this is very near and dear to my heart, and I think this is another benefit statewide And lastly, it brings in $1.6 million additional to the Arctic Winter Games. So as was spoken before, there's $500,000 in the budget right now. This would put an additional $1.6, so $2.1. I think everybody knows how important the Arctic Winter Games is. I'm sure the Fairbanks members would be very happy because it's supposed to be in Fairbanks.

And the games bring together 2,000 participants, 20 sports, and 600 family members, VIPs, sponsors, and lots of attention to Alaska. So again, something that benefits the whole state. So I hope my amendment— I tried to keep it in line with what I heard in Finance in both bodies, that needs to be statewide impact. There's an emphasis on major maintenance, which two of these projects do, and I hope you vote yes. Representative Schraggy.

Thank you, Mr. Speaker.

I have mixed feelings about Amendment Number 2, to be quite honest. I don't really like the idea of pulling money out of the school major maintenance list.

But I will say, when I got that letter at the House Finance Committee, and I think the letter said that it was an extremely poor use of state funds, it left a pretty sour taste in my mouth. We're doing the best that we can with the limited funds that we have. Yes, revenues are up this year. Enough to do all that we want to do. And so to see an entity say that we more or less don't think that this is an appropriate appropriation, um, does push me towards supporting an amendment like this.

I will say that the projects identified from the— by the member from South Anchorage are all very good and worthwhile projects. In particular, I would call out the Wonderland Project. We heard about it at the Finance Committee. There's a real need It would do a lot of good. I think I'm going to ultimately vote no on this amendment to honor the work of our Finance Committee and the Finance Committee in the other body.

But I do so with some hesitation because this may be, in fact, a better use of funds than the $5 million for the Galena School District. Their letter certainly seems to indicate as much. So for myself, I'll be voting no on this amendment, but I do appreciate it coming forward from the member from South Anchorage. Thank you, Mr. Speaker. Representative Fields.

Thank you, Mr. Speaker. First, I want to move and ask unanimous consent that I be excused from voting because I am a volunteer board member for the PAC. There's no objection. Representative Fields, you've been excused to vote. Thank you.

And I agreed to be a volunteer board member on the PAC, frankly, because in the absence of some major investment, that facility is at risk of closing down. Major life and safety and operational issues. If you've been to the PAC recently, there are bags inside zip-tied to capture leaks that are flowing into the building. A lot of people don't know, when Broadway came to Anchorage, some of the Broadway equipment and performers were actually trapped on an elevator that stopped working on its way down as they were trying to offload. You cannot operate a facility without a freight elevator.

The PAC is the place in, in Alaska where we can see performances. It absolutely has statewide importance. I want to note this is not the only money. Um, Anchorage voters just approved an investment in to keep the PAC open. Senator Murkowski has visited the PAC and is pursuing federal money.

This is matching funds for money put in by local taxpayers that our congressional delegation is fighting for It is critically important. I also want to provide some additional information about the Dome. The Dome is a facility that serves schools across our region. It also is a place that is important for numerous sports teams. So when we think about the health of kids, it's really important.

The Dome has free time for seniors to come. So in the winter, it's one of the few places seniors can get out and socialize and walk around. And I think most compelling This $1 million does leverage significant private sector investment. It unlocks a multimillion-dollar private sector investment. If we don't make this investment, the age of the fabric on the dome will mean that the dome will shut down very soon.

So this keeps this facility open. So I appreciate the thoughtful nature and balanced geographical nature of this amendment and applaud the member for standing up for important projects across the state. Representative Schwacke. Thank you, Mr. Speaker. I oppose this amendment for the primary reason that these $5 million were added to a very large, very needed renovation project to one of my rural schools, the Sidney C. Huntington Elementary and High School.

This particular project is a significant project for Galena. This school is breaking in half. If you've ever seen photos, you're looking at a 6 to 10 inch gap down the middle of the school.

The school district went through a significant effort and put a tremendous amount of funds into ensuring that this project made it onto the major maintenance school list. It turned out it was a very large project. In total, originally, it was a $36 million project. They pared it down to a $17 million project, hoping that we could get funding for it this year. I'm gonna repeat, it's number 2 on the school major maintenance list.

And right now it only has a $5 million appropriation.

This appropriation is there because this facility is over 50 years old. It is experiencing widespread structural and systems failure.

It includes water intrusion, mold, core structural degradation. The project addresses essential system failures. A roof replacement is absolutely necessary to prevent structural collapse. Foundation repairs are necessary due to widespread piling failure.

Replacement of failing plumbing systems that are causing sewage backups in the school.

Permission to read a short section from this letter? Permission granted. I heard two members say that the letter to finance said that this would be an extremely poor use of state funds. I have the letter in front of me, and I spoke to the superintendent this morning, and I don't see those words in this letter. The estimated total The total cost to fully address these critical needs is approximately $17.8 million.

While the FY 2027 capital budget includes $5 million for this project, that level of funding is insufficient to resolve the underlying structural and systems failures. Partial funding risks ineffective use of state resources as unresolved foundational issues will continue to drive deterioration and may render incremental improvements unusable. It does not mean that these dollars cannot help the project move forward. Specifically, they do need to finish the engineering and the project proposals. They can start on groundwork.

They can address plumbing issues. They can address roof leakage issues.

Specifically, when we have roof failures in our schools, We then have systematic failures throughout the infrastructure. I ask that you vote no on this amendment because these $5 million are critically important and they will go a long way towards a very, very critical school major maintenance project that I will repeat again is number 2 on the major maintenance list. And the district put in a tremendous amount of dollars to get to that point. Please do not reappropriate these funds. Representative Gelvin.

Thank you, Mr. Speaker. I appreciate the opportunity to give a few comments.

I— this is a tough one. I'm not sure how I'm going to vote, but I do think it's important that the body is aware that our Bond Reimbursement and Grant Review Commission has over 103 major maintenance projects on the list, and I am grateful that this year there's going to be more cleared off of that list than ever, or at least in the recent few years, I should say. And we're all— we also have 14 projects on the capital improvements list, so that's 117 in all. And so my question for the representative of this amendment is, was there consideration of the looking down the list and putting those $5 million in the next couple of projects that are on our list. That's a question that I have because there is a lot of work that goes into formulating which projects are of need.

I do appreciate— I also read the tone of the superintendent from Galena insinuating that this was, um, so little money that for them it would not have been helpful. And I, and I do appreciate what we just heard from the representative from that district who shared, uh, important words about how that school is, uh, in, in disrepair. I don't deny that either, but I do want to just comment that we do have a process in this state for looking at major maintenance projects, and we do have a list of 117 projects. I do also appreciate that what I see on the list in this amendment is helping youth, and that's important to me too, because I do see that each of these projects, especially the Dinelli Family Services at Wonderland, that is a project that I know will have tremendous impact statewide on vulnerable children. So this is— will be a tough amendment for me to vote on, but I also wanted to appreciate that there may be a question involved about whether or not we're following, uh, process.

Thank you. Representative Stapp. Thank you, Mr. Speaker. So the Amendment 2 before us actually asks two separate questions, Mr. Speaker. It asks if we want to fund additional projects in the first portion of the amendment, and the second portion is if we want to not fund the major maintenance list option number 2.

So I move and ask unanimous consent to divide the question and ask that the projects be taken up first.

At ease.

The house will stand at ease until 3 PM.