House Finance, 4/21/26, 9am

Okay, I'm going to call this meeting of the House Finance Committee to order. The time is currently 1:41 PM on Tuesday, April 21st, 2026. And present today, we've got Representative Allard, Representative Moore, Representative Co-Chair Schrag, Representative Co-Chair Josephson, Representative Galvin, myself, Co-Chair Foster. And folks can mute their cell phones. We have two items on the agenda today, and that is House Bill 362.

That's the respiratory care license by the House Labor and Commerce Committee. And then the next bill that we have is SGR 29. That's the constitutional amendment on education funding. It's the bill that we heard this morning. And want to note that we also have with us Representative Jimmy, and let's see here.

So I think the plan is regarding the respiratory care license bill, we're going to receive our first introductory presentation on the bill, and then we will go to invited testimony on that bill and then to questions. And also, actually, we'll go to the fiscal— one fiscal note and then questions. And then on the, on the other Resolution SGR 29, the Constitutional Amendments on Education Funding resolution. We will do the fiscal note, walk through the fiscal note, and then do public testimony. We have two fiscal notes on that bill.

So with that, also I would like to note that we also have with us Representative Stepp as well as Representative Bynum and Representative Tomaszewski. And so with that, I would like to invite up Representative Hall as well as her staff, Joan Wilkerson. If you could please come up to the table and put yourselves on the record. And like I say, what we'll do is we'll, we'll get the introduction before we go to questions. We'll go to the invited testimony and then we'll jump into questions.

So with that, welcome Representative Hall.

Thank you, Co-Chair Foster. Uh, good afternoon, uh, co-chairs and members of the House Finance Committee. My name is Carolyn Hall and I represent West Anchorage. It's House District 16, the neighborhoods of Turnagain, Spenard, and Sand Lake. As mentioned, HB 362 about respiratory therapists is a House Labor and Commerce bill.

Um, so in emergency medicine, a person who is unable to breathe is classified as a Code Blue, requiring immediate respiratory intervention. Anyone who has experienced a breathing deficit episode will tell you it is one of the most terrifying events a person can experience. In the medical professions, those who are specially trained to treat breathing problems are called respiratory therapists, or RTs. Alaska has RTs, but we are the only state in the United States that does not license respiratory therapists. Our outlier status creates disadvantages.

Patients lack the usual safety net of enforced standards, and providers lack a clear credentialing framework. Without licensure, an out-of-state RT needs no local permit to practice, even via telehealth. This leaves Alaskan patients and facilities behind national norms. Enacting an RT licensing law would bring Alaska in line with national practice standards, improve patient safety, and integrate respiratory care into the broader healthcare system. Because we lack RT licensure, This leads to the following disadvantages: patient trust in credentialing is diminished.

There is no state agency to enforce quality standards, including consistent continuing education. Anyone claiming to be an RT in Alaska only needs a college program certificate, not a license. Health care facilities must depend on voluntary certification, which lacks the administrative oversight structure backed by the force of law that a statutory licensure program provides. The result is patients are exposed to risks and healthcare facilities face difficulties in recruiting and retaining highly qualified RTs. Patient safety must be our top priority.

Licensed RTs meet consistent competency standards through, through accredited education and validated national exams. Licensure guarantees that every practitioner has completed an approved training program and passed a rigorous exam before treating patients. In contrast, Alaska's current system lacks a formal license, leaving patient care vulnerable to unqualified providers such as those who have lost their licenses in other states. So regarding standardized training and exams, licensure laws mandate graduation from accredited programs and passing national exams ensuring essential skills. Regarding ongoing competency, licensed RTs must keep their credentials current through continuing education.

Medical science is evolving all the time. Without a continuing education program as part of a license requirement, how are Alaska RTs to become aware of evolving therapies that can help save lives? And lastly, regarding regulatory oversight, in Alaska there is no local system to verify qualifications or penalize unsafe practices. Licensing enables regulators to monitor active RTs and discipline those who make mistakes. House Bill 362 is a committee bill from the House Labor and Commerce Committee, and the committee members voted unanimously to bring this bill forward to correct a glaring deficit in Alaska's medical service industry.

And I hope that you will do the same. And Mr. Co-chair, we have the invited testifier is Miss Angela Euler. She is a registered respiratory therapist and she is also the president of the Alaska Society for Respiratory Care. Thank you, Mr. Co-chair. Great.

Thank you very much. We're going to go over to the invited testimony and Ms. Euler, if you could put yourself on the record and go ahead and begin with your invited testimony.

Good afternoon, members of the House Finance Committee. My name is Angela Whaler. I'm a registered respiratory therapist and president of the Alaska Society for Respiratory Care. Thank you for the opportunity to speak today in support of House Bill 362, which establishes licensure for respiratory care practitioners in Alaska. Respiratory therapists play a critical role in caring for Alaskans across the lifespan, from premature infants in the NICU to trauma patients in the emergency department, to individuals with chronic lung disease and critically ill patients requiring mechanical ventilation.

We are present at the bedside during some of the most vulnerable and resource-intensive moments in patient care. Currently, Alaska is the only state that does not require professional licensure for respiratory therapists. House Bill 362 is an important step toward ensuring consistent standards for education, competency, accountability, and professional oversight. Licensure protects patients by verifying that those providing complex cardiopulmonary care have met nationally recognized educational and credentialing requirements. From a financial and systems perspective, this bill is also about risk reduction and sustainability.

Respiratory care is a high acuity, high cost area of healthcare. Ensuring a qualified standardized workforce helps reduce variability in care, prevent complications, and support better patient outcomes, all of which contribute, contribute to more efficient use of healthcare resources over time. Importantly, House Bill 362 is structured as a non-boarded program with the Division of Corporation Business and Professional Licensing overseeing the licensure process. For respiratory care practitioners. The administrative costs associated with the licensure will be fully covered by licensing fees.

House Bill 362 was carefully developed using scope of practice language from other states and aligned with national best practices. It does not expand the role of respiratory therapists beyond what we are already trained and nationally credentialed to perform. Instead, it establishes a clear regulatory framework that supports safe, high-quality, and consistent care statewide. Respiratory therapists practice under physician direction and are integral members of the healthcare team. Licensure does not change this collaborative model.

It strengthens it by ensuring that all practitioners meet uniform standards. I would also like to highlight the grandfather provisioning for current practicing certified respiratory therapists in Alaska. This bill was thoughtfully written to avoid disrupting the existing workforce. Those currently practicing in good standing will have a pathway to licensure that recognizes their experience and continued service to our communities. At the same time, this legislation allows Alaska to align with national— with the national trend where registered respiratory therapist credential is becoming the standard for entry into practice.

This alignment supports workforce development, recruitment, and retention, uh, critical, critical considerations in a state like ours. Ultimately, House Bill 362 is about patient safety, accountability, and long-term strength, strength of Alaska's healthcare system. It provides transparency, establishes standards, and supports both quality care and responsible resource utilization. On behalf of respiratory therapists across Alaska, I respectfully ask for your support for House Bill 362. Thank you for your time and consideration, and I am happy to answer any questions.

Great. Thank you very much. I'm going to jump right in really quick with the fiscal note, and then we'll go to questions here. So with that, Ms. Sylvan Robb, I believe, are you— if you could put yourself on the record and just walk us through the single fiscal note that we have, and then we'll go to questions. And the first person I have on the lineup is Representative Tomaszewski.

So with that, welcome. Thank you, Mr. Chair. For the record, Sylvan Robb, Director of the Division of Corporations, Business and Professional Licensing.

To look at the fiscal note for this bill, the control code is BZUAO.

And so this fiscal note has $46,100 in fiscal year '27 and then $46,000— excuse me, $41,600 in the subsequent years. It should be noted that is DGF, so those funds will come from the professional licensing fees paid by respiratory therapists. Um, the bulk of the fiscal note covers, uh, the remaining portion of the cost for one position. So we would reclassify an existing office assistant position that's vacant into a licensing examiner 1. That's about $18,000 of additional cost after that reclassification.

And then there are $4,000 of travel costs and then some costs for a regulation project and to cover potential investigations. Great. Okay. Thank you very much. So with that, we'll go and open it up to questions either for the sponsor or for Ms. Robb or for the invited testifier, Ms. Euler.

So with that, first of all, I've got Representative Tomaszewski and then Galvin. Representative Tomaszewski. Thank you, Co-Chair Foster. Whoever can answer this, I'm just— my question is in regards to respiratory therapists, how many are currently working in the state? Representative Hall.

Thank you, Co-Chair Foster. Representative Tomaszewski, I would love to defer to the person most qualified to share that, and I would start with Ms. Angela Euler. Okay, Ms. Euler.

There are current—. Thank you. There are currently between 200 to 250 practicing respiratory therapists in the state. Okay, and just a quick follow-up. Follow-up: Do you know, Miss Euler, if there is a multi-state licensure compact with the respiratory therapists currently in the United States?

Currently they are working towards that. I believe that there are 6 states that are currently working on that. Okay, thank you. Okay, Representative Galvin.

Thank you, Co-Chair Foster. Through the Chair, I think this might be— I have a couple of questions. The first one is, I normally see anything related to healthcare go through health first, and so I typically defer to healthcare providers who are giving more context around a bill related to healthcare. This certainly makes sense, especially knowing that we're the only state without licensure. That concerns me.

But I'm also just wondering about whether we heard from any organizations like AHA or anyone else. I'm looking in this packet, which is a large packet of support letters. Lots of support. The only one that I see from Alaska is, I believe, Ms. Procare, who is on the line.

So I just wondered if there were other Alaskan healthcare providers who have weighed in. [FOREIGN LANGUAGE] Through the co-chair, Representative Galvin, my understanding from meeting with those who approached us to sponsor this bill that there has been a tremendous amount of vetting gone into the bill, including with AHA. But I'd have to go back and get additional details to firm up my answer for you. It's been a while. Okay.

Thank you. I think I think that's the only question I have really, is just about that, just making sure there's not any problem with that. Thank you. Representative Hall. Thank you, um, Co-Chair Foster.

To Representative Galvin, a text message lifeline just came in to me, which I appreciate, and not only AHA has written a letter of support, but also ASMA has too, and we will make sure that those are in front of committee. Great. If we could get those released to all of us here, I think that'd be perfect. Thank you so much. Representative Stout.

Thank you, Chair Foster, to the chair, to Representative Hall. Thanks for being here. Always good to see you in Finance. Um, so it seems like a fairly straightforward thought to me. Um, my only question is, typically when we license kind of new things regarding, um, anything in the health sector that will change the health insurance billings or some of the cost structure.

I'm curious since it's the L&C bill and the member, Rep. Galvin, is correct, typically that would kind of come up in health and stuff like that. Were you guys able to track down or figure out if the bill were adopted would it change anything in insurance billing or eligibility or stuff like that? Through the chair. Rep. Paul. Through the co-chair, Representative Staff, my understanding is that it would not change insurance billing, but I would also like to defer to the invited testifier because I believe she can speak to it a little bit more in depth than I can.

Okay, Ms. Weiler.

Thank you for the question. To my knowledge, licensure of respiratory therapists would not directly increase insurance reimbursement rates. Respiratory therapists are typically salaried employees of the hospitals or healthcare organizations in which they work. Our compensation is determined by our employer and is not directly tied to to insurance billing or reimbursement structures. Last quick follow-up, Mr. Co-chair.

Representative Stau. Yeah, through the chair to our wonderful invited testimony. Just a quick follow-up on that. So typically, like Medicaid billing and stuff, if you have a different type of professional, it's generally coded differently. So just the question is, in your knowledge, nothing's going to change in billing and coding if we were to do this?

Through the chair. Ms. Euler.

Thank you for the question, and not to my knowledge. Okay, thank you. Okay, any further questions? Rep. Sandemore. Yeah, thank you, Co-Chair Foster.

I was just— thank you for being here, Representative Hall. I'm just looking over the sectional here, and Section 9 allows individuals already practicing respiratory care before the effective date to continue practicing for up to 1 year without a license. While obtaining licensure. What is the process for obtaining licensure and how much does that cost? Representative Paul.

Through the co-chair, Representative Moore, I would like to defer to Director Robb. I think she may be able to answer that question. Ms. Robb.

Thank you again. For the record, Sylvan Robb. Through the chair to Representative Moore, So the cost for licensure— obviously this is not a profession that we currently license, but looking at professions that do not have a regulatory board that have a similar number of people as we expect to get licensed as a respiratory therapist, the cost for licensure are somewhere between $100 and $325 for a 2-year period. We do carefully track costs, and so Once we have had licensure for a while, then we will know the exact cost, and those costs will reflect the cost to regulate the profession. But just as an estimate based on what we know now, in terms of the process for licensure, um, once the bill passes, uh, the division will promulgate any regulations we need to stand up the program, create the necessary forms for people to apply for a license, get the website to allow people to find the information they need in order to apply for licensure and have the, the information they need, we'll hire that individual that's reflected on the fiscal note, and that person will get trained up in what they're looking for.

As people's applications and documentation comes in, they'll review those to ensure they comply with statute and regulation, and once they do, then that individual would be issued a license. Great. Um, and so just kind of going through all your guys's um, support letters. Those are wonderful. Have you guys had any— is there been any kind of negative, no support, opposition for this, uh, bill, or anything that you guys hear coming through like that?

Representative Hall. Through the co-chair, Representative Moore, there has been zero opposition to my knowledge. Wonderful. Okay, thank you. Okay, Representative Bynum.

Thank you, co-chair Foster. Through the chair, to the Mr. Chair, Mr. Bill Sponsor, thank you for bringing this forward. A couple of questions I have is that when we look at this, this is going to depart from a lot of our other medical— a lot of our other medical language that we have in statute, which refers to having oversight boards. This obviously is not going to have a board, but it's going to depend on the department to establish standards.

Language on bill— on the page 3 of the bill, line 29, it talks about a nationally recognized organization for respiratory therapists and approved by the department regulation. And then I look at some of the language that's being used here that says respiratory care practitioners, and I'm assuming that's a very broad term because when I go out there and I actually look, I see that there is a national board for respiratory care Care, that's a national board, but we aren't specifically referencing that and the standards that they might put forward. Can you, can you true up the language that we're trying to use here in the bill versus what might be out there nationally for a nationally recognized organization that's providing standards and how that might differ, how they may differ? Representative Hall? Through the co-chair, Representative Bynum, words do matter.

And when it comes to respiratory care practitioners in particular, we actually had a— if I'm remembering correctly and not confused, you know, I'm not going to say because I don't want to misspeak. But suffice it to say, I would like to defer to Ms. Euler as she is the subject matter expert when it comes to her profession. Ms. Euler. Thank you for the question. I will say there is a National Board for Respiratory Care that we do get nationally.

Um, that's where our testing goes through, where we're able to take the national registry. Uh, and respiratory care practitioner and respiratory therapist are used interchangeably.

Yes, follow-up. Yes, I appreciate that clarification. I'm just— it's just interesting that when I go look out, and I'm not in the medical profession, but I go to look and see that we're putting new statute in here through Chapter 90 to define this respiratory care practitioner, and then I go out there and I just curious, I go search and say, well, is there a national standard for this, and it pops up that yes, there is, but the terminology that they're using in the standard language for the National Board for Respiratory Care uses different terms. And I was just curious if there's an intentional reason we're using RCPs as opposed to RRTs, the difference between registered respiratory therapist and certified respiratory therapist that may align with the terminology being used by the National Board for Respiratory Care.

As far as the verbiage, as I was— as I stated previously, this was drafted carefully with verbiage from other states as well, and with the national Board for Respiratory Care, the registered respiratory therapist is the standard that we're going forward with or would like to go forward with. Certified respiratory therapists do practice currently in the state, which is why we included the grandfather clause, but I would be happy to get back with a more solid answer.

Thank you. And then one quick final follow-up. Rep. Bynum. Thank you. Um, in the bill, we are specifically relying on the department to set the standards and criteria, and we just— I don't want to use the word vaguely, but we just say nationally recognized organization, and to me that's pretty vague.

Whereas in the other statutes we establish boards, and I understand we're trying to probably not establish another board, but the thing that boards do is when we assign members to those boards, they're professionals from industry that set standards and set criteria for how care is being provided. And has some level of oversight. In this case, we're just giving that authority to the department, and in this case, it's not even Department of Health. It's just, um, basically how we might license many other things. And so I was just— I'm just trying to get a better understanding on the decision point that was saying we don't want to have oversight of a board, but we do want to let the department make those decisions.

Representative Hall. Through the co-chair, Representative Bynum, you are correct. The division would be creating those regulations and creating and establishing the licensure process. I would like to defer to division director, Director Rob, to speak on this. This more eloquently than I can.

Ms. Robb? Thank you for the record. Sylvan Robb. Through the Chair to Representative Bynum, there are currently 25 programs— excuse me, this would be the 25th. There are 24 programs that are currently regulated directly by the division with no board.

A number of those are healthcare programs. They include naturopaths, athletic trainers, behavioral analysts, acupuncturists, audiologists, speech-language pathologists, I won't go through the whole list, but there are quite a few healthcare-related programs that are overseen directly by the division. And that is part of the travel costs that you see in the fiscal note, is to ensure that we stay up to date with national standards and that we are able to remain current on what's required for this profession. Thank you. Okay.

Seeing no further questions, Representative Hall, do you have anything you'd like to close with? We'll set the bill aside for now. And, uh, move on to our next resolution that we've got this afternoon. Representative Hall. Uh, thank you, Mr. Co-chair.

Um, I don't have much to share in closing remarks other than I really appreciate the committee's time and consideration of this bill to hopefully close this really significant gap that we have in our healthcare industry. Thank you. Great, thank you. And for anyone who may be watching, um, I suspect that our next meeting may include public testimony, but we'll notify folks of that. So with that, thank you very much, Representative Hall, and we're going to move on to the next item, and that is SGR 29.

That's the constitutional amendment on education funding. And so with that, I'd like to invite up Senator Hoffman's staff, Mr. Tim Grusendorf. If you could please come up and put yourself on the record. Um, first thing we'll do is we're going to review the fiscal notes. 2 Fiscal notes.

And then after that, we'll do public testimony. I think we've only got 2 people online for that. And then we're going to go back to questions. And we do have alleged legal on the line as well. So with that, Mr. Gruessendorf, welcome back.

Thank you, Mr. Chairman, House Finance Committee members. For the record, my name is Tim Gruessendorf, staff to Senator Hoffman and the Senate Finance Committee. Just to recap, SGR 29 will create a new section in the Constitution and to create an education fund in a separate fund in the state treasury, and the money may be appropriated only for the public— for public education. And if passed by two-thirds majority in each body, the bill will go before the voters. It bypasses the administration, goes straight to the voters.

To let them have their say on whether they feel like education rises to the level that deserves to have a dedicated fund in our Constitution. Great, thank you very much. And, um, I'm going to jump right into public testimony here. And so, um, let's see here. I'll open public testimony for SGR 29, and if folks would like to submit written testimony, they can do so by emailing at [email protected].

And so with that, I've got first Miss Erica Burr calling from Fairbanks, and then after that will be Rebecca Bernard. And actually, it looks like we have a third person, that's Lon Garrison. And so with that, Miss Erica Burr, if you can state your name and your affiliation. Looks like you're calling in from Fairbanks.

Yes, hello, I'm Erica Burt. I am a teacher and a parent in the Fairbanks North Barboro. I'm testifying today in support of SJR 29 for the creation of a dedicated fund for education. I also have questions about whether and how the proposed fund could be used to support school preparedness for our communities. Um, investment in quality early childhood education dramatically multiplies the return on K-12 funding.

Please visit theheckmanequation.org for more information about the incredible benefits of expanding access for birth to 5 education. Yeah, I want to thank our legislators, especially this committee, for taking our school funding and workforce crisis seriously. Pursuing—. Actively pursuing multiple approaches to support sustainable improvement is absolutely what we need doing. As I look forward to the conversations that further progress of SJR 29 could prompt, I also want to be clear that progress towards setting up a new fund is not the same as spending sufficient funds to support our children's education.

Our schools need a meaningful, sustainable increase to education funding now and each year in the future to close the growing funding gap and to keep pace with inflation. Kids, parents, educators, and employers depend on your ongoing energetic support. Thank you for taking the time to thoughtfully consider, promote, and refine this and other tools to build our Alaskan economy, workforce, and community now and for future generations. Working together is a deeply held Alaskan value. When Alaskans work together for a strong future, it gives us the courage, hope, and purpose we need to keep showing up and giving our best every day.

Again, thank you for taking our school funding and workforce crisis seriously. We look forward to hearing more on this conversation. Thank you. Bye. Great, thank you very much.

I don't see any questions, so, uh, next up we've got, um, oh, it looks like we lost somebody, but we have Lon Garrison up next calling in from Juneau. If you can put yourself on the record.

Yes, hello, this is Lon. Can you hear me? Yes, we can.

Thank you, Chair Foster and members of the committee. For the record, my name is Lon Garrison. I'm the executive director of the Association of Alaska School Boards. ASB strongly supports Senate Joint Resolution 29. At its core, this resolution reflects a forward-looking vision, one that recognizes public education not just as a yearly obligation but it's a long-term investment in Alaska's future.

By creating the constitutional authority for a dedicated education fund, SJR-29 establishes a structure that has the potential to provide sustained, stable, and protected funding for public education over time. This concept aligns directly with AASB's longstanding beliefs and resolutions. Belief Statement Number 7 affirms that the educational programs and funding must be a top priority for the state of Alaska. SJR 29 reinforces that principle by creating a mechanism that elevates the education funding as a permanent and protected commitment. Second, ASB Resolution 2.1 calls for timely, predictable, equitable, and adequate funding of public education.

While the structure of the fund will be determined in future legislative action, This joint resolution creates the framework for greater predictability and long-range financial planning, something our districts need and strongly support. Most directly, SJR 29 aligns with ASB's Resolution 2.10, the Education Endowment, whereas AASB explicitly supports the establishment of an adequately funded, well-managed education endowment to provide a secure and dedicated fiscal resource for public education. Additionally, this proposal is consistent with our Resolution 2.44, which also supports dedicated funding sources outside of the traditional foundation formula, recognizing that a diverse funding structure can strengthen our overall system. Importantly, SJR 29 ensures that funds within the structure may be used only for public education, reinforcing the constitutional responsibility of the state to maintain a system of public schools and ensuring that these resources remain focused on student success. In Alaska, we understand the value of long-term thinking when it comes to our most important assets, and that is our students and the system that supports them.

They deserve that same level of foresight. As JR House Bill 29 represents that opportunity to create a lasting financial foundation for public education, and one that can benefit not just today's students but generations to come. Thank you for the opportunity to testify. Thank you, Mr. Garrison. We've got 2 questions.

Representative Galvin. Thank you, Co-Chair Foster. Through the Chair, Mr. Garrison, I, I have a question with regard to possible future legislation. I know that in the past I've heard folks from your organization and other organizations ask for longer than 1-year certainty around education funding. And so my question is, if there was, for example, like other states do, 2-year funding for public education, would this be the place where we would park the funds for the additional year?

Is that what— how you would see that? And is that in your mind permissible? I know you've studied this a lot. Mr. Garrison.

Yes, through the chair, um, Representative Galvin, as I understand it and as I listened to the discussion earlier today, that is exactly what I think this could be used for, because it's only the legislature, uh, through its appropriation process, uh, allocating funds out of this fund that it could be used for public education. So I would see the opportunity for the legislature to take advantage of, uh, the possibility of depositing funds from a variety of sources into the public education fund and then using them in a more long-term stance. So if, for in effect, the legislature decided at some point to fund education on a 2-year basis, then could that be used? I would assume that that could be the case, but of course the Department of Law would need to weigh in. Okay, Representative Bynum.

Thank you, Co-Chair Foster, through the Chair. Thank you very much for calling in and testifying in support of this. I know you're a champion for education. I guess my question really is about your thinking and vision about what you hope that this will accomplish in the sense that currently the legislature already has the authority and ability to appropriate funding. And we can also do multi-year funding for education through additional funds into our public education fund currently.

Yet the legislature still hasn't done so or doesn't do so. The current bill or the resolution in front of us is basically asking us to, at the pleasure of the legislature, create this fund. And so I'm just curious to understand what your vision for what you think this will accomplish if we already have the appropriating authority to do exactly what has been suggested under current law. And then also you had mentioned that there would be an endowment, and I was wanting to know what your vision was for the endowment portion. Thank you.

Mr. Garrison.

Yes, um, through the chair, Representative Bynum, my vision or my hope would be that this particular resolution would set up the public education fund such that, as it suggests, that it's a protected fund, and that's the legislature, much like the constitutional budget reserve would allocate funds to that and be able to use those funds maybe in lieu of general funds, depending on how things looked from year to year, that this would be a fund that could help support. I hope it would not necessarily supplant, but I suppose that could be the case in times of shortage. So in relation to the endowment piece, I apologize if that were a little bit misleading. I think one of the things that we have contemplated would be the potential for the state to create an endowment that would work, you know, frankly, something similar to or along the lines of a permanent fund where an endowment would generate revenue. We have that to some degree with the Public School Trust Fund, and that certainly does generate revenue that, as you heard earlier, generates $36 million that goes into the education funding stream.

So I think it was meant more in reference to, could it be envisioned that the, the, this particular fund could function in some way similar to that?

Thank you. Okay. Do we have any further questions for Mr. Garrison or Ms. Representative Stapp? Yeah. Thank you, Co-Chair Foster, to the chair, to Mr. Garrison.

Lahn, it's good to hear from you. I am—. Given the fact that the fund— basically the funding is ultimately going to be coming out of our investment fund already. Money in terms of our POMB draw. I don't see— and we've never not made the BSA allocation for schools.

I don't think in the history of the state— could be wrong on that— but I don't think we've ever shortchanged that appropriation, at least since I've been in the building. I guess if you set up another fund and you constitutionally protect that fund and you deposit money that basically comes from the permanent fund into that fund, you are just kind of diminishing the rate of return on the permanent fund by setting up a smaller fund for education. So help me understand, other than sweepability, if we were to do this, I mean, how does it just not net overall less money by diminishing the value of the money we take out of the earnings reserve account already? Through the chair, if you know the answer. Mr. Garrison.

[Speaker:CHAIR] Yeah, through the Chair, Representative Staff, you bring up a great point. That's something that I had not analyzed or thought about, and I would concede that, you know, as you think about utilizing funds from the permanent fund, obviously that's such a large fund and the way that it's managed that those returns are probably maximized. I think In terms of this particular situation, the idea was that really you would be setting up a fund that could only be used on public education. And would it be worthwhile to do that in terms of being able to protect a long-term source of education funding? Of course, we have to have revenue that goes into it in order to— for the legislature to appropriate money out of it.

But I would concede that, you know, that is probably something that we need to take a closer look at in terms of return on investment. Does it make a sense in the long term? I think the idea around this fund, though, again, was just to create a more protected fund dedicated simply to public education. So thanks. Okay, I don't see any further questions.

Is there—. Thank you very much, Mr. Garrison, for your testimony. I don't see anybody else in the room who would like to testify. Is there anyone else online that I may have missed who would like to testify? I'm not seeing any.

So with that, I'll go ahead and close public testimony on ASJR 29. And if folks would like to submit written testimony, they can do so by emailing us at [email protected]. And so with that, we have two fiscal notes to walk through. And so, uh, Ms. Carol Beecher, if you could put yourself on the record and walk us through the fiscal note, maybe cite the control code that's on your fiscal note just to make sure we have the same one. Yes, good afternoon.

For the record, my name is Carol Beecher, Director of the Division of Elections. The division of the control code is ICIPG And the division submits a zero fiscal note to— if we would put this, should it pass, this resolution would go on the general ballot, 2026 general election ballot in November. And the cost of providing the information in the official election pamphlet is minimal, and therefore we are submitting a zero fiscal note. Great, thank you very much. Next up we've got Ms. Pam Leary.

If you could put yourself on the record and walk us through your fiscal note as well.

For the record, this is Pam Leary, the Treasury Division Director in the Department of Revenue. Uh, the fiscal note that we put forth is an indeterminate one. We just wanted to get on the record the fact that if the, um, amendment does pass, that there will be a cost to managing the fund, but we just don't know what that will be at this point, as it will depend on the amount in the fund and how it's invested. Great, thank you. And is the control code on your fiscal note BRM-MT?

Ms. Leary, are you there?

Oh yes, that is correct. That's the control code. Okay, perfect. Thank you. Okay, so with that, um, questions for the sponsor or, uh, the fiscal notes, um, folks?

Representative Bynum, then step in. Galvin, thank you, co-chair Foster. This is specifically question for Taxation Treasury. And I appreciate you guys being available to give us the fiscal notes. Obviously, you say it's zero, and there's some uncertainty with how monies in a dedicated fund would be invested, if invested at all.

And so I guess my question really revolves around the structure of the fund. If it was an endowment fund, I could see that your investment strategy would be one thing, but this is not an endowment. Per se. This is just a dedicated fund that when you put the money in that you need to make sure that it's available. And so don't we already have investment strategies for funds that are technically readily available for appropriation and would need to be available on fairly short notice, meaning not long-term invested?

Ms. Leary.

Through the chair, Representative Bynum, that is correct. We do have a gamut different types of funds with different investments based on liquidity needs. And for our budgeted purposes, we usually charge a range of basis points. So for something that is not that— that is not invested like what you might call an endowment fund would be, so less equities, more fixed income, it's a much lower rate to charge to the budget. And it runs the gamut, but our highest level right now is 10 basis points or 0.1% of the value of a fund.

And funds that are managed like that include the Public School Trust, the Education Endowment Fund, So it includes both endowments and other funds. Representative Bynum. Thank you. Quick follow-up. So effectively, if we, if we as a legislature this year decide to put an extra $1.5 billion into the public education fund, it sounds like you guys would be investing that money that's in that fund about the same that you would be investing it if I were to create this public education fund through a constitutional amendment and putting that additional additional money into that for the purposes of future use.

Is that accurate, Ms. Leary?

We would be—. Through the chair, Representative Frydom, we, we could have additional money go into the public school trust and have it managed that way through that vehicle, or it can be in another separate dedicated fund.

[Speaker:KARUBAS] Quick follow-up. My question specifically was, if we as a legislature this year decided to forward fund for next year and put that additional $1.5 billion into the public education fund, wouldn't you just invest that the same as if you were putting that same money into this protected fund that was intended for future use? Ms. Leary.

Through the chair, Representative Bynum, that would be correct, and we would charge based on the assets under management. Thank you. Okay, Representative Stout. Yeah, thank you, Co-Chair Foster. To the chair, Mr. Gustendorf, I'm having a hard time understanding where the money is actually going to come from for this.

It says land transfers. And of course appropriations. So is the intent of establishing the fund— do we have lands that we would transfer into here, or where would we appropriate the money from? Because again, the kind of the question I asked Mr. Garrison would be, we take draw out of the earnings reserve of the permanent fund, so in effect we would just be transferring money from one investment fund to another investment fund, unless there is something that I am missing. Through the Chair.

Mr. Gruessendorf. Through the Chair, Chair and staff.

I would say that the only difference is that this fund is protected to where you can only appropriate it for education. If you have the other funds, you are able to appropriate it to anything outside of education if you choose to. Lands can be— don't just like the like the university, some people donate land, some people could— the state could sell land, the federal government could give us land.

And then those could be sold and deposited into the fund. But that's— and the other place the fund would get its money is through new revenues or if we have a year where there's extra money at the end of the year, rather than spend it in a supplemental like the years where we had billions of dollars from investments. What we did is from oil, we turned around and we'd spend a billion and save a billion. And you could— we spent down over time the PERS debt we had. We dropped billions into that.

We dropped millions into the PCE fund. You can put these things into funds and as you come across a windfall and that would be the vision of what this fund would— where it would get its deposits from.

Follow-up, Mr. Co-Chair? Representative Stau. Yeah, I think, Co-Chair, through the Chair to Mr. Gussendorf.

I just— yeah, I mean, I understand the benefit here of having a fund that's constitutionalized. I guess the issue in terms of the money is it would be more efficient just to use all those surpluses and just put them in the corpus of the permanent fund because of the nature of the rate of return. So this is going to be run through the Treasury. It's going to be passively managed, I assume, because that's what Treasury does. And it'll take a long time for fund capitalization to get to a point where it will be— have relative utility.

So I guess I don't understand why you wouldn't just keep the money in the permanent fund and then appropriate part of your draw for education, because you are just diminishing the overall rate of return of the money if it is coming from the single place.

So in light of that, I am— like I said, I am just— I like the concept. I just don't understand where we are going to get the money from, I guess. Thanks.

Further questions of the board? Committee. Seeing none, Mr. Gruessendorf, anything to close the session here? No, Mr. Chairman, rather I want to thank you, thank the committee for hearing the bill, and look forward to working with all of you and your staff to see if we can keep this bill moving and come up with something that the state can be— state citizens can be proud of and put education first. Okay, thank you very much.

Okay, so with that, our next meeting is scheduled for tomorrow morning at 9 AM, and at that meeting we'll hear the introduction to House Bill 261, that is the education funding bill, by Representative Story. And so if there's nothing else to come for the committee, we'll be adjourned at 3:32 PM. Thank you.