Senate Labor & Commerce, 4/27/26, 1:30pm

Good afternoon. I'd like to call this meeting of the Senate Labor and Commerce Committee to order. The time is 1:33 PM. We are in BELTS Room 105 of the Thomas Stewart Building in the nation's most beautiful capital city of Juneau, Alaska. Today is Monday, April 27th.

Members present are Senator Gray Jackson, Senator Merrick, Senator Dunbar, Senator Yunt, and myself, Senator Bjorkman. Let the record reflect that we have a quorum to conduct business. Welcome everyone to Senate Labor and Commerce. Please turn off your cell phones or silence them and join me in welcoming our recording secretary, Carrie Tupo, and our LEO moderator, Susan Quigley. Our agenda for today is the consideration of the governor's appointees that have been referred to this committee.

Senate Bill 259, property tax assessment increases. Senate Bill 234, uniform fiduciary income and principal accounts. And finally, House Bill 126, reinstatement of Native corporations, religious corporations. First, we will take up consideration of the governor's appointees that have been referred to the Senate Labor and Commerce Committee. Members have reviewed qualifications and resumes of the appointees who were referred here.

Senator Dunbar has asked that Annette Atwell be available today. Ms. Atwell is joining us via the Teams web. Ms.

Atwell, thank you very much. [FOREIGN LANGUAGE] Good afternoon, Senator Bjorkman and esteemed members of the committee. My name is Annette Atwell and I'm a licensed massage therapist on the board of the Massage Therapy And I am also the chair. Thank you for having me this afternoon.

You're welcome.

Could you please provide the committee with a brief recap of your work on the Board of Massage Therapists and your continued goals?

I have been on the board for nearly 4 years at this point, and through the time we have worked toward reducing the amount of regulations that hinder other people from coming in and becoming massage therapists from other states, to clarify all of our regulations, to simplify them, to make them easier reading, and better understanding. We have also pursued several different things, trying to make sure that the constituents understand their responsibilities as mandatory reporters and as— Also encouraging them to continue with their continuing education. We are also currently working on establishing a framework for an apprenticeship program, and we have just been reviewing distance learning education when it comes to the massage therapy practice.

Very good. Thank you. Any further questions for Ms. Atwell?

I have a question. Um, we're considering some legislation regarding, um, Teladoc appointments. Do massage therapists offer those services?

I know that I have seen some massage therapists across the nation offering things of that nature, but as far as I know, no massage therapists here in the state of Alaska are offering those. I find that— this is my personal opinion, I am not speaking on behalf of the board— I don't exactly understand Um, teledoc work for a massage therapist to be applied via telecommunication unless you're doing energy work. Very good. I think we're on the same page there. Anything further?

Well, thank you very much for being available today, Ms. Atwell. We always appreciate you, your testimony and point of view when it comes to your line of work. Thank you very much. Anything further from members of the committee for any of the appointees? Also online available for questions, the Chairman of the Board of Alcohol Control, Dan Wolukiewicz.

Seeing and hearing no further questions or comments on any of the recommended board members who have been appointed and referred here. What are the wishes of the committee? Thank you, Chair Bjorkman. I move to advance the names of appointees referred to the Senate Labor and Commerce Committee for consideration to the joint session of the House and Senate for consideration. I'll object for the purposes of having the names read into the record.

Welcome back to Senate Labor and Commerce. Mr. Conrad Jackson to read the names. Thank you, Mr. Chairman. For the record, Conrad Jackson, staff to Senator Bjorkman and the Labor and Commerce Committee. Members have a copy of a memo to the Senate Secretary on their desk.

This memo contains the names of the appointees as well as the boards or commissions to which they were appointed. Mr. Chairman, all the members of the committee have had the opportunity to review the resumes and qualifications, and with the exception of Ms. Atwell, there's been no other questions. So at this point, I will read the appointees' names and the boards or commissions and move forward. So, Mr. Chairman, members, those Alaskans who were appointed by Governor Dunleavy are to the Alaska Labor Relations Agency, Jennifer McConnell of Girdwood. To the Alaska Workers' Compensation Board, Anthony Ladd, Anchorage.

Randall McClellan II, Wasilla. Lake Williams, Fairbanks. And Brian Zamatis, Anchorage. To the Alcoholic Beverage Control Board, Dana Wolukiewicz, Anchorage. To the Board of Barbers and Hairdressers, Danielle Hager of Galena.

To the Board of Certified Direct Entry Midwives, Stasha Miller of Valdez. To the Board of Certified Real Estate Appraisers, Mackenzie Labuda, Wasilla. To the Board of Chiropractic Examiners, Edward Barrington of Anchorage and Walter Campbell of Palmer. To the Board of Dental Examiners, Travis Perkins, Anchorage— I'm sorry, Soldotna, get ahead of myself— and Michael Sanders, Eagle River.

To the Board of Examiners in Optometry, Damian Delzer, Fairbanks, Kathleen Rice, Kenai, and Charles Rudstrom, Soldotna. To the Board of Massage Therapists, Annetta Atwell, North Pole. To the Board of Nursing, Michael Collins, Wasilla, and Heather Crivello, Kodiak. To the Board of Pharmacy, Rebecca Balms, Anchorage.

I'm going to butcher this and I apologize in advance. Lillian Okpelke, Bethel. And also Sarah Rasmussen of Anchorage. To the Board of Professional Counselors, Jill Ann Garrity, Anchorage, and Crystal Herring, also of Anchorage. To the Board of Public Accountancy, Elizabeth Stewart of Anchorage.

To the Board of Social Work Examiners, Ivy Valani, Wasilla. To the Board of Veterinary Examiners, Sierra Valero, Wasilla. To the Fisherman's Fund Advisory and Appeals Council, Renee Allward of Homer. To the Marijuana Control Board, Darren Cooper of Anchorage and Eli Cyrus of Kiana. To the State Board of Registration for Architects, Engineers, and Land Surveyors, Sterling Straight of Anchorage.

And finally, Mr. Chairman, to the State Physical Therapy and Occupational Therapy Board, Eliza Ellsworth of Bethel and Michelle Scott-Webber of Wasilla.

Members may have noted that there are 6 names that they've seen resumes for in the review who were not listed. Those 6 members— 6 appointees have, uh, had their names withdrawn from consideration. So to avoid any confusion, I just want to mention that. I'm happy to read those names, but, uh, they're no longer in consideration. Very good.

Thank you, Mr. Jackson. With that, I will remove my objection. Is there any further objection to any of the names that were read for confirmation to those boards and commissions? Hearing no further objections, the names will be forwarded to a joint session for consideration. I remind everyone that a signature on that That committee report does not reflect the intent by any of the members of this committee to vote for or against the confirmation of the individuals during any of the further session.

We'll take a brief at ease while we sign the paperwork and set up for the next bill.

We're back on the record now. First up for bills today is committee substitute for Senate Bill 259. This is our third hearing for this bill. During our prior hearings, we had a presentation of the bill. We adopted a committee substitute version backslash S as in shishmaref as a working document.

I would like to invite my staff, Sylvia Bieber, to the table to provide a brief recap of the bill. Welcome back to Senate Labor and Commerce. Please put yourself on the record and begin your brief recap. Thank you, Mr. Chair and members of Senate Labor and Commerce Committee.

For the record, my name is Sylvia Bieber, staff to Senator Bjorkman. Thank you for hearing SB 259 again today. This legislation provides municipalities with the authority to cap yearly increases in assessed property values by 3 to 10%. The cap would reflect full and true value and would be enacted by ordinance. The bill requires the assessor to true up the value based on the existing market conditions every 10 years or sooner if the property is removed or if ownership is transferred.

Thank you very much. Any questions for Ms. Bieber or the bill sponsor?

Seeing and hearing none, we will now open public testimony on Senate Bill 259. Is there anyone in the room or online who wishes to testify to this bill?

Seeing no one in the room, we'll go online. First up, we have Mr. Ed Martin. Mr. Martin, please state your name and affiliation for the record and begin your testimony. You have 2 minutes. Yes, good afternoon.

My name is Ed Martin Jr. I reside in Kenai, Alaska.

[FOREIGN LANGUAGE] I thank you, the committee, the chair, and those that are taking up this bill. I wrote a letter for the committee and sent it to my representative, Jesse. Senator, please review that letter before you move forward. You may have some good intentions, and I know this all started at the borough with assessed values going up. But that's not really the culprit here.

It's the mill rate. And you folks know this, okay? And I wrote you this letter to spell out why this bill is misconceived. In fact, to be honest with you, I like the fact that my house is 71 years old, that my house value went up. It's not the place of the government to try to in some way— and I read the sponsor statement— to artificially affect those values.

In fact, it's wrong to do that. The mill rate is the problem, and you folks need to look at this a little bit clearer and, and more precise as to why people pay taxes. So I can go through the rest of the letter. I don't want to get excited here, but you have a lot to do yet with this bill, and I don't think that it's aimed in the proper fashion of which it should. Definitely the mill rate sets the value.

Reread the statutes under Title 29 so you fully understand it. In fact, I went on to your state site that explains some of this stuff. So please do something about this before you move this any further, Jesse, and other members of this committee. Thank you very much for allowing me to speak. Thank you for your testimony, Mr. Martin.

We'll go next to Mr. Aaron Landvik. Please state your name and affiliation for the record and begin your testimony. You have 2 minutes. Dear Chair Bjorkman and Chair Merrick and members of the committee, Thank you for the opportunity to testify on Senate Bill 259. My name is Aaron Lambek and I serve as President of the Alaska Association of Assessing Officers.

I speak today from the perspective of professional assessment standards and the practical realities faced by assessor offices statewide. Our association and the International Association of Assessing Officers strongly support a property tax system that is fair, uniform, transparent, and grounded in current market value. I understand and respect the value of providing relief to homeowners facing rapid increases in, in assessed value. However, SB 859's optional cap on annual assessment growth, whether 3%, 10%, or any number, raises significant concerns. Assessment caps are well studied across the country, and the research is clear.

They create long-term inequities. Over time, similar homes end up with very different tax burdens. Longtime owners of rapidly appreciating properties receive a substantial subsidy, while new buyers and owners in slower-growing areas shoulder a larger share of the tax load. These disparities can persist for decades and are well documented in states like California and Florida. Caps also introduce administrative complexity.

They require maintaining two sets of values, tracking multi-year adjustments, and verifying eligibility, all of which increase workload and reduce transparency. These challenges can weaken the consistency and accuracy of assessments. Fortunately, there are better tools available that provide taxpayers with relief without compromising fairness. Truth in Taxation and transparency requirements give the public clear visibility into how budgets and mill rates, not Assessments drive tax increases. Targeted relief such as homestead exemptions, circuit breakers, or deferral programs for seniors and fixed-income residents can be tailored to those who, who most need help.

Improved data and oversight, including statewide mandatory sales disclosure and restoration of the Deputy Assessor, would strengthen accuracy, support local offices, and increase public confidence. These reforms address taxpayer concerns while preserving market-based valuation, which is the foundation of a fair tax property system. For these reasons, I respectfully urge the committee to consider alternatives that provide relief without introducing inequities or administrative burdens into Alaska's tax system. Thank you for your time, and I'm happy to answer any questions. Thank you very much for your testimony, Mr. Landvik.

Are there any questions from committee members?

Is there anyone else in the room or online who wishes to testify to this item? Seeing and hearing none, we will close public testimony on Senate Bill 259.

Brings the bill back before the committee. Is there any further committee discussion?

Just a couple of comments here. In response to some testimony and other concerns out there. It's interesting that folks are seeking other solutions. Local governments have tried some of those solutions, including mandatory disclosure, which Mr. Landvik knows duly well. That was repealed by the voters.

Not a pragmatic possibility for relief. Other folks have seen the effects of their assessed values on their property tax burden, and they know what the increase in dollars and cents means to them and what they are required to pay. That matters. A portion of the bill that we included here was a 10-year true-up, making sure that there was not disparity over a number of years, which is included in this bill. Which we've talked about at previous hearings, really seeking to definitively avoid the inequities that were mentioned that occur in other states that have hard caps.

This bill is not a hard cap. It simply is a smoothing over time by which assessed values are allowed to rise so that they are consistent and expected by property owners and so that their property tax bill are something that is not a shock when it increases by thousands of dollars from year to year. As you look at the pragmatic possibilities of raising and lowering the mill rate, that's much easier said than done. Everyone likes to puff up and kind of announce proudly that they've cut taxes, but nobody likes to raise taxes when additional roads need to be maintained or other infrastructure needs to be upheld. So although in theory, um, a mill rate might, um, be seen to fall up and down like a bobber, um, that also is not a pragmatic political reality that happens.

In fact, we have municipalities around the state that have, um, capped their tax revenue to avoid that from specifically happening. So what do we do? Like, what tools are out there that can be employed optionally by municipalities to avoid there being a very significant revolt against the tax regime by which we collect monies to fund public safety, to maintain roads, and to provide money for schools. It's predictable assessments that do not spike substantially, and that's precisely the reason for this bill. So, you know, if it were a different world, maybe other possibilities would be reachable and achievable, but we've seen that they are not pragmatic or politically possible at this time.

So that's why we have the bill that we have before us now. Any further discussion?

What are the wishes of the committee? Thank you, Chair Bjorkman. I move to report committee substitute for Senate Bill 259, version 34-LS1249/Sierra, reported from committee with individual recommendations and the attached indeterminate fiscal note. Is there any objection?

Seeing and hearing none, committee substitute for Senate Bill 259, version 34-LS1249/s, as in shishmaref, is reported from committee with individual recommendations and attached indeterminate fiscal note. We'll take a brief at ease while we sign the paperwork and set up for the next item on the agenda.

We're back on the record. It's 1:59 PM here in Senate Labor and Commerce. Next up, we'll take up Senate Bill 234, sponsored by the Honorable Senator Matt Clayman. This is our first hearing on the bill. To present the bill, we have sponsor Senator Clayman and his staff, Serena Hackenmiller.

Welcome to Senate Labor and Commerce. Please put yourselves on the record and begin your presentation. Thank you, Mr. Chair and members of the Senate Labor and Commerce Committee. For the record, this is Matt Clayman, Senator for District H in West Anchorage.

Sen. Bill 234 makes important changes and updates to the current Alaska Fiduciary and Income Act, which governs trusts in Alaska, by replacing it with the Alaska Fiduciary Income and Principal Act. Like Uniform Code legislation, this legislation makes updates to the current framework as a response to industry needs. The changes align state law with current industry practices to keep Alaska competitive in the national and global trust market. For example, the new framework allows fiduciaries to use modern portfolio theory, which shifts the focus toward total return investing rather than older models that center on interest and fixed income. This change enables more diverse and contemporary investment strategies within trusts.

This and other updates in Senate Bill 234 will modernize Alaska trust law and help ensure that Alaska remains a leading trust jurisdiction. My staff, Serena Hackenmiller, can now go through the sectional analysis if the committee wishes. Thank you very much, Senator Clayman. Are there any questions for the bill sponsor?

Hearing and seeing none, Ms. Hackenmiller. Thank you, Chair Bjorkman and members of the committee. For the record, this is Serena Hackenmiller, staff to Senator Clayman. So despite the bill being 52 pages, there are only 6 sections. I'm going to start backwards on Section 5, which repeals the current act.

So it's AS 13 Chapter 38. And that actually will take care of Sections 1, 2, and 4 because all of— all that they're doing in those sections is conforming by changing it from AS 1338 to the new act, which will be AS 1339. So going to Section 3, this is the big part of the bill. This is the one that takes up all the pages. This would enact Chapter 39 for the new The Alaska Fiduciary Income and Principal Act.

There are 4 major categories of updates from the prior or existing act. First, it enhances judiciary discretion, which would grant fiduciaries more broad support or power to adjust between income and principal. And what's new as well under that is that there is now a requirement that they must be acting in good faith. And you'll see that good faith kind of trickle through the rest of the standard, the changes. Second, it modernizes the unitrust framework.

So it allows a fiduciary to convert a traditional income-only trust into a unitrust without a court order. Third, it expands scope and jurisdiction. So it's not just formal trusts. It would allow for legal life estates and other types, as well as in this section, it— or in the expanded scope and jurisdiction, it updates and defines when Alaska laws apply. So it depends on the jurisdiction, if it originates in Alaska, if it's being overseen in Alaska.

So those are some definitions that are updated. And finally, it adds, uh, judicial oversight and safeguards, maintaining that a court can only intervene if a fiduciary has abused their discretion. And it reinforces that the specific terms of a trust override the default rules of the act. So this is the framework, and a specific trust— terms of a trust can override those. The last section, Section 6, applies this act to existing trusts, so it provides flexibility for them, and it also adds receipt conditions for fiduciaries that deal with some natural resources.

This doesn't have an effective date, and it'll just follow the constitutional bill timeline. That concludes my section analysis, and we do have Abigail O'Connor, the chief legal officer for Peak Trust Company, on the line for questions because it can be confusing.

Very good.

Any questions for Ms. Hackenmiller or the bill sponsor?

We will now go to Ms. Abigail O'Connor with Peak Trust. Ms. O'Connor, please state your name and affiliation. Through the chair. Please begin. Uh, good afternoon through the chair.

This is Abigail O'Connor, Chief Legal Officer with Peak Trust Company. I'm also with the Alaska Trust and Estates Professionals Group and a longtime trust and estates lawyer, and I'm calling you from Homer, Alaska today.

Excellent. Do you have any comments to provide on this piece of legislation?

Thank you, through the chair. Yes, this— trustees need a set of rules for allocating money and property that come into a trust that go out of a trust between income and principal. Principal is corpus. And the rules that we have really just became outdated. And as mentioned previously, the Uniform Law Commission updated these rules, and we're, we're trying to catch up with the times and adopt the updated rules.

And that is the purpose of the bill. So it's a lot of technical provisions about allocating receipts and disbursements between income and principal. I'm very much in favor of the bill. I think it's great for trustees being able to administer trust for Alaskan families and for those who come to Alaska to have their trust administered here. And I'm a Available for any questions.

Thank you very much, Ms. O'Connor. Senator Dunbar has a question for you. Thank you, Mr. Chair. For those of us who are not trusts and estates lawyers or otherwise involved in this industry, can you describe to us the difference between an income-only trust and a unitrust?

Sure, absolutely. So an income-only trust is a trust for which, for example, I create a trust and provide that my husband receives all of the income, but he doesn't receive any of the principal for his lifetime. And, um, these are very common, um, especially after the death of a, of a grantor, uh, for estate tax purposes. These are very common. Uh, the challenge sometimes that we run into with these income-only trusts is that the income is not steady throughout the year.

And so you might have more income in the beginning of the year and less later, and it becomes hard for budgeting for the surviving spouse. And this is just an example, but a unitrust, instead of saying all income, is a percentage of the trust. And so, you know, January 1st, you look at the value as a trust and you say, okay, the trustees make some— somewhere between, you know, 3% and 5%, usually the range, and said, okay, you're going to get, you know, 4% or 5% of the value and we'll get it to you quarterly throughout the year. So it allows for a more stable distribution standard and the beneficiary now knows how much he or she will receive throughout the year. So it's just easier for budgeting.

Senator Dunbar. Thank you, Mr. Chair. Thank you, Ms. O'Connor. That's a very useful description.

I have a question. Under the law now, if you had an income-only trust and it paid out for as long as it was supposed to, and then the beneficiary of that trust also passed away and no subsequent person was identified, what happens to that trust? Is it automatically converted into a unitrust and then the, and then the principal distributed elsewhere, or does it remain an income-only trust with a new beneficiary?

Uh, that's a great question, and it's very rare. I don't even know if I've, I've ever seen one example where there's no what we call a remainder beneficiary. But if there is none, you know, that if the— in my example, if the spouse dies and the trust is silent as to what happens, then most, most likely, if the trust is completely silent— that's a really good question— I would think it would go back to perhaps the laws of intestacy. I don't know the answer, but it would not continue as a unitrust. It would terminate, and then we would have to figure out figure out who the remainder beneficiary should be.

Senator Dunbar. Thank you, Mr. Chair. I'm just, um, having very unpleasant flashbacks to the rule against perpetuity, uh, lesson, uh, from law school, and so I will not pursue this line of questioning any further. Let's see, Matt's laughing.

Certainly not in perpetuity. Thank you. Any further questions?

Seeing and hearing none, Ms. O'Connor, thank you very much for being present in Senate Labor and Commerce today. We appreciate your presentation. Senator Clayman, any final thoughts on the bill? Just thank you very much for taking the time to hear the bill, and certainly if you do have more detailed questions, feel free to come by our office and we can either— if we can't answer them, we know who to call that can give you a more detailed answer. Most excellent.

This time we will set Senate Bill 234 aside for future consideration at another meeting. We'll take a brief at ease while we set up for our final item.

We're back on the record now. It's 2:11 here in Senate Labor and Commerce. Our last item on our agenda today is House Bill 126 by the honorable Representative Neil Foster. This is our first hearing on the bill. To present the bill, we have staff to the bill sponsor, Mr. Paul LeBoul.

Mr. LeBoul, welcome to Senate Labor and Commerce. Please put yourself on the record and begin your presentation. Thank you, Mr. Chairman. Paul LeBoul, staff to Representative Foster. Apologies, Representative Foster couldn't be here.

He's currently chairing Finance. Um, House Bill 126 is a bill that used to come around fairly regularly. When a corporation is involuntarily dissolved, they cannot legally incorporate as the same legal entity, and the normal course of events is for those assets of the corporation to be distributed to the shareholders, and then they can reincorporate with the same name, but they're not the same legal entity. When it comes to Alaska Native corporations, ANCSA corporations, that's problematic because the primary asset is land that is granted to them under that federal law. So they need to be able to reincorporate as the same legal entity.

Um, the last time, uh, we had to do this, I think, was back in 2018. And during that process, the department came to me with language that would make this a permanent process so we don't have to do it again. We didn't implement it at the time because we were moving quickly under the 24-hour rule, but decided that the next time it came around we'd pursue the permanent fix. And that is what this bill does. It allows ANCSA corporations to reincorporate as the same legal entity at the discretion of the department.

Thank you very much, Mr. LaBolle. Are there any questions for staff to Mr. Foster, Mr. LaBolle? Senator Dunbar. Thank you, Mr. Chair.

I think I understand the need for this with regard to Native corporations, but this bill has been amended to include religious organizations and nonprofits. Do you have someone that can— oh, they took that out. Okay. I'm just reading this. Has that already been removed?

Oh, very good. I apologize. No further questions.

Are there other questions or commentary by members of this committee?

Seeing and hearing none, we have with us today the Director of the Division of Corporations, Businesses and Professional Licensing, Sylvan Robb. As well as the Director of Banking and Securities, Tracy Reno, online. Are there any questions for either of those two folks?

Seeing and hearing none, also available is Ann Siviluk, Chief of the ANCSA and Securities with the Division of Banking and Securities. Any questions for her? Seeing and hearing no questions. Mr. LaBolle, do you have anything in wrap-up? No, just thank you, Mr. Chairman, members of the committee, for your time.

Very well. This time we will set House Bill 126 aside for further consideration at a future meeting. The Senate Labor and Commerce Committee will meet next on Wednesday. April 29th, when we will take up Senate Bill 262, social media for minors, and Senate Bill 266, insurance reimbursement rates. As there is no further business to come before the Senate Labor and Commerce Committee at this time, we are adjourned at 2:15 PM.