SFLR-20260507-1030

Will the Senate please come to order and will members please signify your presence by voting.

There are 20 members present. Thank you. With 20 members shown as present, we have a quorum to conduct business. The invocation this morning will be given by Pastor Terry Stage Harvey with the Shepherd of the Valley Lutheran Church. Members, please rise.

The first Thursday in May was declared the National Day of Prayer beginning in 1952, when President Truman called us as a nation to humility, fasting, and thanksgiving. And so, respecting the faith of all Alaskans and Americans, may you hear that call today through the poem called Praying by Mary Oliver.

It doesn't have to be the blue iris. It could be weeds in a vacant lot or a few small stones. Just pay attention. And then patch a few words together and don't try to make them elaborate. This isn't a contest, but the doorway into thanks and a silence in which another voice may speak.

Amen. Amen. Thank you, Pastor Stage Harvey. Senator Toland, would you please lead us in the Pledge of Allegiance? I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

Thank you, Senator Tobin. Will the Secretary please certify the journal? I certify as to the correctness of the journal for the 107th legislative day. Thank you, Madam Majority Leader. Mr. President, I move and ask unanimous consent that the journal be approved as certified by the Senate Secretary.

Thank you. Hearing no objection, the journal has been approved. Senator Hoffman. Good morning, Mr. President. I move and ask unanimous consent that the prayer be spread on the journal.

Thank you. Seeing no objection, the prayer has been spread upon the journal. At this time, are there guests for introduction? Seeing none, are there— Madam Secretary, are there messages from the governor? I have no messages from the governor this morning, Mr. President.

Thank you. And are there messages from the House? A message dated May 6th stating the House passed and returned SB CS for Senate Bill 192, Community and Regional Affairs Evacuation Designation Levels. The bill has been referred for enrollment. A message dated May 6th stating the House has passed and is transmitting for consideration CS for House Bill 210 Finance amended by the House Finance Committee, an act relating to workers' compensation coverage for disability from diseases for certain firefighters relating to occupational disability benefits and medical benefits available under the Public Employees Retirement System and providing for an effective date.

Referred to the Finance Committee.

House Bill 246 by Representatives Josephson, Allard, Bynum, Story, Hemmschulte, Galvin. An act relating to allocations for the Special Education Service Agency and providing for an effective date. Referred to the Finance Committee.

CS for House Bill 302, Labor and Commerce, by the House Labor and Commerce Committee. An act relating to travel insurance and providing for an effective date. Transportation. Those are all the messages from the House this morning, Mr. President. Thank you, Madam Secretary.

Are there communications? I have no communications today. Are there reports of standing committees? Report dated May 5th stating, in accordance with AS3905080, the Transportation Committee held a hearing on the following appointees. A signature on this report does not reflect intent by any of the members to vote for or against the confirmation of the individuals during any further sessions.

Board of Marine Pilots, Angel Holbrook, Colin Maynard. Signing the report, Senator Bjorkman, Chair, Senators Steadman, Tobin, Kiel. The Labor and Commerce Committee considered SB 111, digital product repair, and recommended it be replaced with the Labor and Commerce Committee substitute, new zero fiscal note. Signing no recommendation, Senator Bjorkman, Chair, Senators Merrick, Yunt. Signing do pass, Senators Dunbar, Gray-Jackson.

The bill has no further referral. It is in the Rules Committee. The Labor and Commerce Committee considered CS for House Bill 249, Labor and Commerce, transfer vehicle title to insurer. Previous zero fiscal notes. Signing do pass: Senator Bjorkman, Chair, Senators Gray, Jackson, Yunt.

Signing no recommendation: Senators Dunbar, Merrick. The bill has no further referral. It is in the Rules Committee. The Resources Committee considered House Joint Resolution 44, support Native Corporation business development program. Previous zero fiscal note signing do pass.

Senator Giesel, Chair, Senators Clayman, Rauscher, Wilkowski signing no recommendation. Senator Myers signing amend. Senator Kawasaki. The resolution has no further referral. It is in the Rules Committee.

Those are all the standing committee reports this morning, Mr. President. Thank you, Madam Secretary. Are there reports of special committees? I have no special committee reports today. And are there Senate resolutions for introduction?

I have no Senate resolutions for introduction today. Thank you. Are there Senate bills for introduction? Senate Bill 289, by the Senate Rules Committee, by request of the Governor. An act relating to elections, relating to voters, relating to voting, relating to voter registration, relating to election administration, relating to campaign contributions, relating to write-in candidates for President and Vice President of the United States, relating to the crimes of unlawful interference with voting in the first degree, unlawful interference with an election, and election official misconduct relating to voter registration on permanent fund dividend applications relating to the duties of the Commissioner of Revenue and providing for an effective date.

Refer to State Affairs and Finance. Senate Bill number 290 by the Senate Rules Committee, by request of the Governor, an act extending the Governor's October 9, 2025 declaration of a disaster emergency in response to the 2025 West Coast storm and providing for an effective date. Refer to the Finance Committee. Those are all the Senate bills for introduction today, Mr. President. Thank you, Madam Secretary.

Please read the first item on today's calendar.

Senate Bill Number 174 by Senator Dunbar, an act establishing the Alaska Invasive Species Council in the Department of Fish and Game relating to management of invasive species and providing for an effective date. The Resources Committee considered the bill. New fiscal note signing due past. Senator Giesel, Chair, Senators Clayman, Dunbar, Signing no recommendation, Senators Kawasaki, Myers. The Finance Committee considered the bill previous fiscal note.

Signing do pass, Senators Olson, Hoffman, co-chairs. Signing no recommendation, Senator Steadman, co-chair, Senators Kaufman, Cronk, Merrick, Keele. I have no amendments. Senate Bill 174 will advance to third reading on our next legislative calendar. Madam Secretary, please read the next item on today's calendar.

Senate CS for CS for House Bill number 263, Finance, an act making appropriations for the operating and loan program expenses of state government and for certain programs, capitalizing funds, amending appropriation, making supplemental appropriations, making appropriations under Article 9, Section 17(c), Constitution of the State of Alaska, from the Constitutional Budget Reserve Fund, and providing for an effective date Before the Senate in third reading on final passage, there is an amendment number 1 by Senator Rauscher on members' desks. Thank you, Senator Rauscher, to move to go back to second reading for an amendment.

Do I need to move that? Yes. Yes, sir. I move and ask unanimous consent of the body to go back to second for the purpose of amendments. Thank you.

Hearing no objection, House Bill 263 is back in second reading. And will remain in second reading until all amendments have been considered. Senator Rosser, brief addis.

[FOREIGN LANGUAGE] So will the Senate come back to order, please?

Senator Rauscher, to move Amendment Number 1. Thank you, Mr. President. Mr. President, I move Amendment Number 1. There has been an objection. Senator Rockshire, to explain your amendment.

Thank you, Mr. President. So, uh, I'd like to start by clarifying exactly what these funds are so there's no confusion. These dollars originate from, uh, ANWR lease payments made by ADA in 2021. About $12.8 million in total. When those leases were later canceled, the federal government refunded those payments.

Then in 2025, after the federal court vacated the cancellation, ADA repaid those same funds to reinstate the original lease terms. At that point, federal law required a 50/50 split. Half to the U.S. Treasury, half to the State of Alaska. What we are dealing with today is the state's share of that revenue. All I— and I want to be very clear on one point.

These are not ADA receipts, okay? And this is not an ADA dividend. These are state revenues already in the general fund and fully available for appropriation under the existing law after all required distributions, statutory transfers, and prior obligations have been met, approximately $3 million remains available for appropriation. This amendment simply allocates that remaining balance in a responsible and targeted way. It directs $2 million to establish a state trooper post in Talkeetna.

An area that is seeing increased activity along the park's corridor, including Willow, Talkeetna, Trapper Creek. Public safety needs in that— in that region are growing because that region is growing. The valley is growing, and when the valley is growing, its rural areas grow. The state is growing in rural areas. The remaining balance is directed to ADA to support continued responsible development in the coastal plain, investing the very activities that generated this revenue in the first place.

This amendment is a straightforward approach. We're not touching obligated funds. It's only— it only directs the remainder of the general money that is already available to us. This amendment does not sweep funds, it does not violate statute, and it does not rely on new revenue. It simply uses what is already available to support public safety in a responsible development manner.

With that, I just urge the body to consider this amendment and press the yes button. Thank you, Senator Rascher. Is there further discussion? Senator Hoffman. Thank you, Mr. President.

However you cut it, the ANWR revenue is just undesignated general fund revenue. It goes into the fund. So this would be an appropriation using general funds of $2 million.

We considered this request at the Finance table, understanding that the Public Safety Committee did not forward this to the Finance Committee.

Therefore, I would say that it should probably be given further consideration since the Governor did not request this and be considered next year. I would recommend a no vote. Thank you, Senator Hoffman. Is there further discussion?

And wrap up, Senator Rosser, no? And is the objection maintained? Then if you are ready for the question. The question being, shall CS for CS for House Bill 263 Finance pass the Senate? Senator's Amendment Number 1, I better make that very clear.

Shall Amendment Number 1 to Senate CS for CS for House Bill 263 Finance pass the Senate? Members may proceed to vote.

Do any senators wish to change their vote? The secretary will announce the vote. 6 Yeas, 14 nays. And so by a vote of 6 yeas to 14 nays, Amendment Number 1 has failed to pass the Senate. Madam Secretary, there is an Amendment Number 2 by Senator Rauscher on members' desks.

Senator Roscher. Thank you, Mr. President. Mr. President, I move Amendment Number 2. Thank you. Is there an objection?

There has been an objection. Senator Roscher, to explain. Yeah, I appreciate it. So this amendment is straightforward. It provides clear legislative intent to ensure the community assistance funding is used in a manner consistent with our constitution.

Article 9 is not ambig— I'm sorry, Article 8 is not ambiguous. It directs the Alaska's natural resources are to be developed for the maximum benefit of our people. That principle is foundational to how we govern and how we allocate our public funds. Community assistance exists to support our communities. To help provide stability, services, local capacity projects.

It's not intended to subsidize efforts that work against the very economic engine that sustains those communities and our state. This amendment simply draws a reasonable and measured line. It states that state funding, including funding that flows through nonprofit organizations, should not be used in to conflict with constitutional mandate. Importantly, this does not restrict speech. It doesn't prohibit advocacy, and it does not target legitimate nonprofit work.

Organizations remain free to operate and express their views, but should not be doing so with community assistance This amendment ensures accountability that ensures the public dollars are aligned with the principles set forth in the Constitution rather than working at cross purposes with them. It's core and it's about responsible stewardship. State funds and maintains consistency in our policy framework. Mr. Mr. President, in the other body, this passed 40 by 40 votes. It wasn't in the version that we used to start in this process on our side, because we used the governor's.

So those votes aren't— they don't show up, nor does this actual— but it was voted 40 votes on the other side, as they realize it's that important to us how this money is actually used. In favor of what we're trying to do here, Mr. Speaker. So I just thought I'd add that also. Thank you. Thank you, Senator Rauscher.

For discussion, Senator Hoffman. Thank you. Senator Rauscher is correct. We started our budget with the governor's budget, understanding that this is important to the other body. It will be a point that's going to be discussed at the conference table and we will go through that debate at that time.

So I would recommend a no vote and we will be looking at this at the conference table and come back with what the decision is at the conference report. Thank you, Senator Hoffman. Senator Kiel. Thank you, Mr. President. It's a great relief to hear the co-chair in charge of the operating budget I would say that the conference committee will work on this language.

It's just a little narrow for my taste, Mr. President. Like the member from District 0 who offered the amendment, I respect the whole of the Alaska Constitution. And so I'm a little concerned that the restriction here would only be one section about development of our resources, which the Constitution absolutely requires for the benefit of the people. But the two sections down The Constitution requires our resources be available for the common use of the people, and we wouldn't want to see that impinged. A few articles up, the Constitution protects freedom of religion and the right to bear arms.

We wouldn't want to see those impinged. So, Mr. President, sharing the member's reverence for the whole of our Constitution, I'm going to vote no today so that we can either work this— rework this language or bring it back when it's a little broader. Thank you, Senator Keeley. Is there further discussion? Yes, Senator Dunbar.

Thank you, Mr. President. I would just ask a question of the, um, of the maker of the amendment during wrap-up. I, I wasn't at the finance table when perhaps this conversation happened, but I, I don't, I don't fully understand what you're, what you're going for here. Can you provide specific examples of when this happened? So at what point was community assistance funding used in a way that was contrary to this article.

If you could please provide specific examples, I would appreciate it. Thank you, Mr. Chair. Thank you, Senator Dunbar. Is there further discussion?

Senator Roscher, in wrap-up. Thank you, Mr. President. To the member from Anchorage, I appreciate the question. When Communities use our dollars, which we give through— this is revenue sharing money, and we have many projects that we support. We may do it through resolutions.

We may do it through dollars in appropriations in the budget. We may do it through a bill. But either way, when those projects are moving forward And then we give this money to communities and they use it against our projects. And that has happened. And so this is what it's saying.

This is not a— I don't know how we can give money to somebody to argue against us on a project we're trying to move. And that's what this is saying, because we're trying to work for the benefit of all Alaskans according to the Constitution. And when that money is used for that, —and it has been before. This should not happen. That's what this is saying.

Thank you. Thank you, Senator Rauscher. Is the objection maintained? If you are ready for the question, the question being, shall the Senate adopt Amendment Number 2? Senators may proceed to vote.

The secretary will lock the roll. Do any senators wish to change their vote? The secretary will announce the vote. 6 Yeas, 14 nays. And so by a vote of 6 yeas and 14 nays, Amendment No.

2 Has failed to pass the Senate. Madam Secretary. There is an Amendment No. 3 By Senator Rauscher on members' desks. Thank you, Senator Rauscher.

Thank you, Mr. President. Mr. President, I move Amendment No. 3. Thank you. As an objection, please explain your amendment, Senator Roger.

Mr. President, I thank you very much. The amendment provides funding for park ranger position in Valdez to support public safety, resource protection, and visitor management in one of Alaska's busiest and most heavily visited outdoor recreation areas and regions. The Valdez area park ranger position was eliminated in 2015. Since then, due to budget cuts, uh, since then, the increased year-round usage of the park has increased exponentially. Recreational sites and participation in the Hill Climb Weekend and Thompson Pass has created life and safety issues for those that are there.

The amendment recognizes that the increased use also brings increased responsibilities. Park Ranger presence helps ensure that public lands are maintained responsibly, visitors are educated on safety and stewardship of the area, and emergencies or incidents can be addressed quickly that way with somebody who is actually local and can address those. This amendment is a modest appropriation with the clear public benefits, sir, and reinstating a dedicated park ranger would ensure that the state residents and seasonal visitors can enjoy recreating safely in that area to avoid the hazards that have happened, the collisions that have been nearly avoided, and those that haven't. And so I just urge a yes vote. Thank you, Senator Rauscher.

Is there discussion? Senator Hoffman. Yes, Mr. President. As explained, this is a park ranger for Valdez. The costs are $375,000 in UGF for the individual.

Additionally, it has $160,000 in startup costs for snow machines, cars, etc. And the ongoing expenses expense would be $215,000. The subcommittee did not recommend this appropriation. It may be valid. There are probably other areas that should also be considered, and I would suggest that those be considered during the next budget cycle, and I would recommend a no vote at this time.

Thank you, Senator Hoffman. Is there further discussion? And wrap up, Senator Rosser. Thank you, Mr. Speaker.

Mr. Speaker, in construction, when we move gravel or from one area to another, it's called a borrow pit. In 2015, everything that was part of what that dollar amount is was moved and used someplace else, like a borrow pit. What we're doing is moving it back. So I don't really understand how the cost should be so high when we're bringing back what was actually borrowed from that area to begin with. That's just a statement of my own and a vision that I see.

And I think that I don't agree with the fiscal note because there was no subtraction when they moved it out of there, but now we're going to add again when you move it back. Anyway, I ask that you push the green button. Thank you, Senator Rosser. Is the objection maintained? If you are ready for the question, the question being: Shall the Senate adopt Amendment Number 3?

Senators may proceed to vote. The Secretary will lock the roll. Do any Senators wish to change their vote? The Secretary will announce the vote. 6 Yeas, 14 nays.

And so by a vote of 6 yeas to 14 nays, Amendment Number 3 has failed to pass the Senate. Madam Secretary, brief at ease.

Will the Senate come back to order, please? Senator Myers. Thank you, Mr. President. I move Amendment 4. Thank you.

There has been an objection. Senator Myers, would you explain the amendment? Darn, I was hoping I'd sneak that one through. So, Mr. President, as is relatively obvious by the language of the amendment, this is the statutory PFD amendment with a backfill out of the budget, the budget reserve as necessary. It is interesting that when I called Ledge Legal and asked them to put this one in, they asked me if I wanted the constitutional budget reserve language.

They said it was optional, which is interesting. We do already have a CBR vote in the budget before us, but— so this is a very statutory PFD amendment, uh, and then the rest of the POMB draw goes for government. I'm sure most of you probably won't like it, but I want to run through why this is important and what my commitment to the body is if this passes. Mr. President, please hold on, this is going to be a little bit of a long one. Mr. President, this, this amendment is not about the check.

Or the size of the check. It's not the dollar figure that's important here. It's not about how cutting the PFD harms the poorest among us the most, although that is true. It's not about how we should follow the laws on our statutes, although that's true too.

It is about how using the permanent fund is the worst revenue option out there for our state.

Economically, a much better use of the Permanent Fund is getting the money out to the people, which is what the dividend does. Functionally, a PFD in Alaska is an oil royalty check. And the question is where we get the best use from those. And before you get too excited about oil taxes, because that issue always pops up when we start talking about this, that's the second worst revenue option for our state, Mr. President. And that's what started us down this path 50 years ago.

That's why we're in this mess in the first place.

Using oil to supply most of our state's revenue was a mistake back in the 1970s. And we have simply compounded that mistake by continuing the pattern and using the Permanent Fund instead. Looking at our revenue history, even before the income tax was repealed, we moved from a roughly 60% of our state's revenue coming from individuals to only about 10% by 1979, with then the income tax being repealed the following year. That's the change that caused our problems. And using the permanent fund for government keeps it going, Mr. President.

Oil created 3 disconnections in Alaska because state revenue is disconnected from the economy as a whole, all of which are perpetrated by using permanent fund earnings for government spending. First off, the government is disconnected from the economy. This is not a new idea. This was identified by Scott Goldsmith over at ICER back in the '80s. Government has no incentive to pay attention to the economy because that's not where its money comes from, and at best it's indifferent.

Sometimes it appears that our state government becomes hostile to economic growth because economic growth means more people, which means more services, more kids in more school, more road maintenance, more troopers, et cetera. We just talked about, in a previous amendment, about how tourism drives some more spending in the state, potentially. But of course that doesn't mean that there's any more revenue to pay for it all. And that's part of the debate that we've been having so much about the gas line this year, Mr. President. Using the permanent fund is even worse for the economy because at least When we were using oil, at least we had an incentive to pay attention to the oil industry.

And now there's no incentive for connecting us to any part of our economy. The second disconnection, Mr. President, is disconnecting the voters from the cost of government.

When the voters feel like they don't have to pay for it, it feels like everything is free. And so the voters have an incentive to always ask for more free stuff, so to speak. They're also missing an incentive to care about quality. Because they're not paying for it. If it's not coming out of your pocket, you care less about the quality of something.

So the average voter doesn't care about outcomes unless there's a crisis. So we're always leaning towards a crisis. And I'll give you a couple of examples of that in a little bit. We had some comments on the floor recently about certain services failing, such as permitting, that matter for our economy. And in a normal state, those problems would have been fixed years ago before a crisis hit, because they were necessary for both government to build the economy which creates the revenue, and for the people who care about where their tax dollars are being spent.

But in a structure like ours where the government is indifferent to the economy and the people are indifferent to the quality of spending, are we surprised that we've made it to a level of crisis now?

And then the third disconnection is disconnecting some short-term thinking from long-term consequences. The ISA research that was presented to us at the beginning of session this year made it clear that oil and corporate taxes have the smallest short-term economic impacts on our state, but the worst long-term economic impacts of all tax types, and also being the most volatile. In addition to harming the economy in the long run, they shield state government from the consequences of our choices.

We can do things around here that hurt the economy and it doesn't hurt us. Using the permanent fund does the same thing by increasing the disconnect between the government between the state and the economy. We spend money based on what's most politically popular in the short term, not what brings long-term growth. We build things but we don't maintain them because using the permanent fund for government means the state doesn't need them for economic reasons. So let me use maintenance as an example of how our spending is disconnected from the economy and driven by election pressures.

We've talked about maintenance in a couple of different ways a lot this year. We spend less money on road maintenance now on a per capita inflation-adjusted basis than we did in 1967, before the pipeline, back when long-term planning and economic health mattered for state government. And we had a lot of talk this year about meeting the match, but we didn't have a whole lot of talk this year about road maintenance. It's interesting to me, Mr. President. We didn't talk much about how any of these road projects help our economy in the long run either.

We're interested in short-term spending because that gets people employed to benefit us politically, because we can get the credit with people back home for supplying jobs for a summer or two. But we don't pay nearly the same attention to maintenance because it's a base service, not tied to a particularly interesting interest group. Mr. President, point of order. Mr. President, Mr. President, point of order. Point of order, Senator Wolkowski.

I'm hard-pressed to— I don't understand how road maintenance is related to this amendment. I would ask that the speaker keep the comments related to the amendment at hand. Thank you. Thank you, Senator Wilkowicz. Senator Myers, please keep your comments to the amendment.

Mr. President, the amendment speaks to the structure of our budget. The structure of our budget influences the incentives and the budget choices that we make here in this state. We don't fully understand and fully discuss those incentives and the choices that we then make, we are being very short-sighted and that is what the amendment is trying to address. I understand I'm going down a rabbit hole a little bit here, but I will come back out at the end of it and I am trying to make some connections along the way as to why this amendment is necessary for the health of our state. In the long run.

Thank you.

Where was I here?

Mr. President, we compound our problem by using federal match for reconstruction projects, leaving less money to fund true expansion that lets the economy grow. Regular maintenance is tied to economic long-term growth because better maintenance means fewer economic disruptions and less maintenance on our personal vehicles. There's a, there's a cost that we're imposing on our citizens.

We got the same problem with school maintenance. Due to the lack of voter disconnect, it's risen to crisis levels again. Capitol Co-Chair reminded us a couple of weeks ago that we're funding school maintenance projects from before 2014, which means they were from back when we had la— money again. But instead, during that time period, we spent money on astroturf football fields.

That tells me that's not a money problem, but it's a priority problem in this state. So we can continue to cut the dividend, but it doesn't necessarily make the situation better in the long run because it doesn't change our priorities. Question is, what does change our priorities, Mr. President? And changing the structure does. Our spending is driven by a revenue model, because people want to cut a government pie for contracts, largely what our capital spending has become.

There's no concern for wider, long-term economy, private sector needs, such as stability and maintenance, and not flysheet projects. We can do ribbon cuttings for a new school, but we can't do that for patching holes in the sheetrock or putting in a new HVAC.

I mentioned school maintenance, but education in general has the same problem because of that disconnection. Having highly educated population is a great way to build human capital that can both allow people to climb the economic ladder and to start businesses that can employ others, diversifying the economy.

As a result, every other state has a reason to want stable funding and policy that creates educated students and adults. But our revenue model based on the permanent fund means that the state doesn't want economic growth and has no need for an educated public. Instead, education is a politically advantageous football that can be used every year, that can be leveraged for votes while ignoring results. Spending that should be an investment in our future instead is just politically popular consumption. Education won't truly be a priority until we fix the disconnection from the economy so that the state really needs educated workers so that we can see education as an investment in a skill set instead of consumption that produces a piece of paper to hang on a wall.

Senator Meyer, this rabbit hole is getting deeper and deeper. Would you go back to the amendment more? I'm working on it, Mr. President. The end result, Mr. President, here is that we have a flat economy. Our economy outside of oil and government has been flat since at least 2005.

That's long before we started cutting the permanent fund dividend as addressed in this amendment. Median household income growth, which is also affected by the dividend, since 1970, so including TAP's construction, is roughly even with the income growth in a Rust Belt state in our country. And since 1984, we've had the worst household income growth in the country.

Even after 50 years of oil, we haven't diversified like most oil states down south did. We're missing a government with economic growth as a priority. We're missing the small incremental gains that don't make the news but build healthy economies over time. And most important, getting to what this amendment can do for our economy. We're missing money we need to jumpstart the economy because royalties go to government.

So as I said at the beginning, a PFD is effectively an oil royalty check in this state. So what if those oil royalties went out to people instead? In most natural resource economies, royalties form the capital needed to get capital into individual hands to diversify the economy. And we've short-circuited that process because first the Royal Royalties and now the Permanent Fund goes to government first, not to individuals. So what if we didn't operate this way.

Finance Committee had a hearing a couple of years ago that was billed as a rest of the story, to use Paul Harvey's phrase, that would have— what would have happened if the state had spent the other half of the permanent fund earnings, as Hammond, as Governor Hammond eloquently put. But they missed the other rest of the story of what could have happened if we'd not spent the other portions of our royalties or other oil income and instead saved it or found ways to get it into the hands of individuals in a nonpolitical in a political manner. A study released in 2017 that looked at natural gas royalties determined that private royalties created double the economic bang for the buck compared to publicly owned royalties. Want to get our state economy jump-started, get it diversified? Let's get the dividend out to people, Mr. President.

We know that we have a shortage of capital for business formation in this state. Despite that fact, We still have 89% of our job growth in this state comes from startups. We've removed the best tool that we have to grow and diversify the economy. And we can talk about the inefficiency of handing out PFD checks and taxing it back, but the simple reality, Mr. President, is you get more economic activity that way. You put more people to work.

You have fewer people leaving the state.

And it's interesting that back in the late '70s, Milton Friedman— told us that we'd be better off handing the oil money out to people rather than keeping it for government spending. It's important to note that he said that in 1977, before the income tax repeal.

So the rest of the story here, Mr. President, is that we gave the state the wrong revenue source that disconnected the state from the economy, the people from the cost of government, and short-term decisions from long-term consequences. We choked off the economy and discouraged long-term thinking. And then we wonder why working-age people with families are leaving the state. Both the group we need to build our state and the group most likely to think about long-term growth potential and trends are leaving. All because of the disconnections created by first using oil money and then using permanent fund money to fund our state.

In the '70s, we assumed that more money was better, especially if it meant no taxes on residents. We didn't think about the different incentives and distortions that each revenue source creates. We thought about the oil money ending, hence part of the creation of the permanent fund itself, but we didn't think about how we would grow and diversify the economy beyond oil in the future. Governor Hickel talked about the ownership state. My first year here, the operating finance co-chair reminded us of the importance of the dividend having first call on the permanent fund.

And I agree with that, as it reflects the fact that the people are the ultimate owners.

If we don't treat people as owners of this land and its resources, but instead the ones to only get scraps or leftovers, we aren't an ownership state, but we're a state of tenants. So, what do we do with this? It's a lot of money. If all we do is we pass it and we leave it alone, it puts us in deficit. I recognize that.

It's in a large deficit.

Earlier this year, the operating coach here said he wanted revenue ideas.

I'm happy to help, Mr. President. This is my commitment if this amendment passes. I already have a tax bill drafted, Mr. President, and there happens to be a bill incentive finance from the other body that it could be put into. The bill that I've got drafted would raise over $1 billion. It includes a sales tax, an increase to the diesel road fuel tax, an adjustment of the per-barrel oil tax credit, a Medicaid provider tax, and the digital business corporate tax that we've been discussing this year.

Significant portions of this revenue would come from out of state, which cutting the dividend does not do. And the vast majority of Alaskan households would end up with more money in their pockets at the end of the year than under the current structure.

I will say that this is contingent— me supporting this is contingent on a real fiscal plan, spending cap, constitutional protection of the PFD, etc. All of the pieces, Mr. President, have been introduced. The options have been studied to death for the last decade. Maybe even further back. We were having the same conversation in the late '90s.

The question is, do we have the will to implement a plan that gets us out of our economic doldrums? I've been both amazed and amused by the speed at which a legislature can move when it wants to. I understand we only have 2 weeks left. We do have the 24-hour rule coming up. That helps a little.

So my question is, do we truly want to fix this fiscal problem and leave a legacy? Do we want to fix our economy? Do we want to give the legislature a reason to care about education? Please join me in supporting this amendment to provide hope for our future, to express trust in the power of our citizens to grow and transform our state. Thank you, Mr. President.

Thank you, Senator Myers. Is there discussion? Senator Hoffman. The bottom line is that this is a full PFD The discussion on what level to fund has been ongoing for many, many years. This would require a CBR vote.

At the beginning of FY26, the Constitutional Budget Reserve Account had $3.5 billion.

The Constitutional Budget Reserve Account is set aside. Since I worked on that particular constitutional amendment when I was chairman of the House Finance Committee many years ago, that fund was set up for rainy day funds. I don't believe that this will classify as a rainy day expenditure, I would oppose the amendment. Thank you, Senator Hoffman. Senator Dunbar.

Thank you, Mr. President. You know, a recent ICER study found that myself and the member from Muldoon have, in nominal terms, the two lowest income districts in the state of Alaska. And because of that, I care very deeply about the permanent fund dividend. When we cut the permanent fund dividend from $2,000 to $1,000, when you remove $1,000 from the permanent fund dividend, for a family of 4, that's real money. That's money that could go to rent, to fuel, to food for low-income folks in my district.

The problem is an amendment like this, disconnected from income, disconnected from new revenue, accelerates our fall towards a zero PFD. Now, the maker of the amendment has stated that using oil to fund most of our state was a mistake, and we repeat, when we, when we repealed the income tax, that change caused our problems. I largely agree with that statement. We are overly reliant on oil taxes and permanent fund revenues in this state, and if the maker of the amendment would like to sponsor a progressive income tax, I will co-sponsor it with him. But that hasn't been the case.

He mentioned that he has a tax bill with a sales tax and a highly digitized corporate income tax. There was a corporate income tax, a highly digitized tax, on this floor last year, and the maker of the amendment voted against it. This amendment, disconnected from new revenue, is impossible and irresponsible. The maker of the amendment also stated that in a normal state, failures would be corrected by now because they're connected to the the economy. I also agree with that.

Every other state in the country has a broad-based revenue source, either a sales tax or an income tax. But again, every significant new piece of revenue that has come to this floor, the maker of the amendment has voted against. And not just him. We had an S corp tax loophole closure that was on this floor, and every member of the minority voted against it. When we bring new revenue, it is voted against.

So again, I would support this if it was connected to new revenue, but it isn't. Now, the governor and his allies— I will say this: actions speak louder than words. And I have said repeatedly that, as revealed through their action, the governor and his allies' plan is to drive the PFD to zero, and I oppose it. And unfortunately, this amendment accelerates that fall towards a zero PFD. We pay out the CBR once It's gone next year or just about gone.

And then where are we? Then we are rapidly towards a zero PFD unless we get new revenue. And so because this amendment does not include new revenue with it, I unfortunately have to oppose it despite my strong support for the permanent fund dividend. Thank you, Mr. President.

Thank you, Senator Dunbar. Senator Yunt.

Thank you, Mr. President, for giving me the opportunity to speak in regard to this amendment. And I I want to thank the maker of the amendment for, um, he really got me at the end there. I would love to see his fiscal plan, and I hope, I do hope he, he sponsors that soon. I hope that happens. But I want to talk about what this looks like if this passes today before any of that happens, right?

And so, um, if I may, I want to go through a couple of things and tell you what this looks like. If we shut down every correctional facility in the state of Alaska and we let out all 5,500 bad guys, right, we lay off every single state trooper, every single village public safety officer, every single Fish and Game officer. We shut down the entire Department of Law.

We get rid of the entire DOT transportation road maintenance. Never plow another state road again.

We're still not even close. To bridge the gap, you then have to turn around and close down half of the schools in the state of Alaska.

And I'm not just talking brick and mortar neighborhood schools, I'm talking correspondence, homeschool, charter schools, all of them. 50% Gone. That's option 1. Option 2, drain the CBR, steal from our kids and our grandkids. That's what you're doing when you do that.

We're living in the moment if we do that. We're living in the moment. We're taking from our kids and our grandkids' future. That is what we are doing. Option 3, sales tax and income tax.

You have no idea how proud I am to live in a state, one of only 2 in the entire country, that have neither. That's what this leads to, 100% guaranteed. That's what that's going to lead to. And if you, you want to talk about private investment in, in private economy, there's no bigger believer in it than me. I spent every day of my life in it.

But you don't get there with an income tax. And if you don't believe me, ask California. Ask, ask you know, uh, New York. Look at what's happening to them right now, right? The only person that wins with an income tax is the IRS, right?

They're going to win. We're going to lose. Alaskans are going to lose if this amendment passes. Alaskans lose. And I'm not talking next year, I'm talking right now.

They lose right now because the next thing we have to do is start talking about an income a sales tax or stealing our kids' CBR for the future, which is going to turn around and handle that. I look forward to seeing the maker of the amendment's fiscal plan and I look forward to helping him and supporting probably some of that. I can't give any full commitments on all of it, I can tell you that. But I look forward to seeing that. You know, last year I— two of the first bills I dropped, one was to reduce spending in a department, $40 to $60 million.

You want to increase the PFD? Let's spend less. That was an actual piece of legislation with a lot of homework done in regard to one of our departments. I dropped a piece of legislation for revenue that I'm polling in my districts right now. That very specific amendment, or that legislation, I'm polling in my two districts right now.

82.2% Of the people in my two districts fully support the legislation I've drop last year. That's almost $300 per Alaskan right there that we could add to the PFD. So hey, I'm here to solve problems. I'll drop tough legislation. I got no problem with filing tough legislation.

But I'm going to tell you right now, if this amendment passes as it's written right now in today's environment, Alaskans lose, including my kids and future grandkids. And I'm a hard no. Thank you, Senator Young. Is there further discussion? Senator Cronk.

Thank you, Mr. President. Um, Hmm, this one's always a tough one, but my baseline has always been be as honest with my constituents as I possibly can. I fully support a full PFD if we could actually pay a full PFD. Our job is to balance the budget. That's our number one job.

And with the revenue that we have from our POMV draw and our oil revenue, It pays for our government. And for people to say that you're taking money away from them to pay for the government that serves them is kind of ironic. We have many needs across the state, have good conversations. And people right now are saying if we don't start investing minimum $500 million a year in our capital budget just to catch up on whether it's deferred maintenance or our failing roads and stuff, we are never going to get there. So we have a serious problem.

And in rural Alaska, where I represent, we have lots of needs. You know, people need new water treatment plants and stuff. And where does that money come from? Well, it's going to come from our state revenue. People say we spend too much in government.

Well, we— you know, and I know they're not going to want to hear this, but we live in a really big state. It's very unique. It's very spread out. It costs a lot of money to get things to different places. So when everybody compares our cost to some other state, I'm like, I don't know if that's a really accurate statement.

I was like, we're probably gonna be the most expensive state to actually do business in. We spend more per student. Well, we probably should. We have schools, remote schools that have to fly everything in or barge everything in. I'm the first that wants to pay a full PFD, like the senator from Anchorage said, and Wasilla made a very clear statement.

This right now is not affordable. It is not a smart thing to pull this out of savings, or, you know, for some people's ideas is, hey, let's just grab it out of the ERA, so let's break our POMB draw. Well, this stuff was set way longer before I came into office, and, you know, back in the day when we had lots of oil run through the pipeline, our oil revenue paid for everything. Thing, but people need to realize that back when we had 2 million barrels, that was great, but when we're at less than a quarter of what that is, the revenue is combined with the POMB to pay for this. People say, cut the budget.

Where do you cut a minimum $1.7 billion out of our budget? I can see, you know, the big vacancy positions, that'll get what, maybe $200 million? $200 Million is a lot of money, but where do you cut $1.7? I've always asked people, Where do we cut that? And there is nothing but crickets.

Okay, nothing but crickets, because really it's not possible to cut our, our government down to where we can pay a $2.5 billion dividend and then actually function as a state. Um, I don't know if we're really functioning as a state right now. Our roads are falling apart, our schools are falling apart, our university is falling apart, and without investment we're not going to catch up. And, you know, I want to make sure that there's revenue there that when, you know, a village like Hoosliya calls and say, hey, we need a new water treatment plant because we don't have any water. I want to make sure there's funds there that can help take care of that.

So I think when we make, you know, we educate people on and how this money actually benefits people across the state, they actually start seeing that a PFD is not the solvable thing, and we do have a government to run. And some of these communities are not gonna generate, you know, $30 million to buy a water treatment plant. It's not gonna happen. So we have to be there as a state, as a government, to take care of all people across Alaska. And this is urban and rural.

That's our job. So this, yeah, with much regret, I wish I could actually vote for a full PFD, But the reality is, is this is just simply not something that we can do at this time. And I wish there was a day, hopefully maybe there's a day here in the future where a full PFD is affordable and we can pay that to people. But right now it's just not possible. And my baseline is I'm going to be as honest as I possibly can be with my constituents and let them know the facts here.

Thank you, Mr. President. Thank you, Senator Crocker. Is there further discussion? Senator Wilkowski. Thank you, Mr. President.

I agree with the, uh, importance of the PFD. That's why I spent a year of my life arguing a case to the Supreme Court of Alaska to try to get us one. Unfortunately, the court disagreed with that.

The reason Alaskans are not getting a larger PFD is really quite simple. For decades, oil funded 90% of our budget. It now funds 23%. We have no other source of revenue. That's as simple as it gets.

It's really— it's not complicated at all. It's a math problem. And we have constitutional obligations, as you heard from the speaker next to me. We've got to fund education. We have a constitutional obligation.

We've got to fund public safety. We've got to fund our corrections. We can't just let our prisoners go. We have road projects and port projects and infrastructure projects. We have schools falling in the ocean.

We have things we have to fund in this state, constitutionally have to fund. And I'm glad that on day 108, the sponsor of the amendment has a fiscal plan. I, you know, I guess I would just note that he's opposed every single thing that would raise revenue that would enable us to pay a higher PFD. He's opposed to highly digitized tax. He opposed the S corp tax.

When he was in the majority, he opposed amendments to increase oil taxes, to cut oil tax credits. So I'm glad that with 12 days left in the session, he now has a plan. But you know what? You can't tell Alaskans you support a full PFD and then spend your entire legislative career opposing the things that would allow you to pay a full PFD. It doesn't work that way.

It's basic math. And so while all of us— who wouldn't love to give away this PFD to their constituents? We all want to do it. We all recognize that people are struggling. But the reality is, until we fix our fiscal situation, it's just not going to be affordable.

We just can't— the money just isn't there. You're going to have to close schools, you're going to have to shut down the corrections, your jails, you're going to have to let prisoners free. And, um, and so I, I look forward to seeing the bills that the sponsor of the amendment is going to put forward to, to fix those things, because I've put those things forward in the past, a number of us have, and they've all been opposed. Thank you, Mr. President. Thank you, Senator Murkowski.

Is there further discussion? Senator Myers in wrap-up.

Thank you, Mr. President. Rapidly making some notes here. Appreciate all the comments.

Comment about drawing down our CBR. It's valid, 100%. And that's why I said at the very beginning of this that the point here is not to draw down the CBR. That's the language in the amendment for right now. But as was already pointed out on the floor today, this is not the final stop for this budget.

We do have a conference committee— well, unless the other body agrees, which happened a few years ago. But we do have a conference committee coming up where some adjustments can be made. I could live with a 50/50 PFD, as has been discussed. In the legislature here for the last few years.

I also recognize, as I said, we've got 2 weeks left, and I understand it's late to introduce a fiscal plan, except there was a fiscal plan that was introduced at the beginning of the year, and, well, we saw where it went.

I was hoping that we'd get some real traction around that, but, well, some folks with more horsepower than me, I hoped. We're going to be able to push that forward. I was willing to engage in that conversation, Mr. President, but now this is what we've got.

Comment that this amendment is disconnected from revenue, and I agree it is. Unfortunately, we can't put, the way our Constitution is written, we can't put a tax bill into the budget bill. That's the nature of the beast, Mr. President. But as I said, I am committed that if this amendment this amendment is adopted to sit down and work with any members of the body, particularly the Finance Committee, to find something that can work. As I said, I think all of the options have already been on the table for a long time.

They have been studied to death. We know which direction we need to be going, Mr. President.

Question of— well, we need to— pass an oil tax or corporate tax or something like that. The issue, Mr. President, is this: do we need additional revenue or replacement revenue? Is it the dollar figure that's the problem, or is it the structure that's the problem? Where the money's coming from? Well, Mr. President, I argue that our problem, as I laid out when I introduced the amendment, our problem is not primarily the dollar figure.

Maybe in the short term it is. But our problem primarily is a structural problem. It's where the money is coming from. And that's why, as for myself and a number of others on the floor have said, I will support tax bills when they are paired up with the full fiscal plan, including a spending cap and a constitutional amendment to the PFD.

Talk about driving the PFD to zero. Now, this amendment doesn't drive the PFD to zero. Draining the CBR doesn't drive the PFD to zero. What drives the PFD to zero is the choices that we make in this body and in the other body and on the third floor about where our money comes from and where our money is going to go. And we made the choice about a decade ago that our money is going to come from the permanent fund rather than having the choice make the choice of a different revenue source, Mr. President.

So this amendment on its own does not drive the PFD to zero. Our choices, our structural choices, are what are potentially doing that. You know, a decade ago we talked about a 50-50 PFD, and then last year we, you know, then we went down to a 25-75 PFD, and then last year we went down to a $1,000 PFD, which is about 16% of the draw, if I remember right. And now we've got in the budget bill before us same dollar figure. Higher draw, but same dollar figure, so the percentage is dropping even more.

That's what's driving our PFD to zero.

Member brought up what we would have to cut in order to be able to afford this. In straight dollar figures, he's right.

The question is, what are we willing to fund in this state? And the thing is that when we fund our government with revenue sources that the people don't see, we don't have that discussion primarily. We have the discussion of what do we want, not what are we willing to pay for. And until we fix that problem, Mr. President, I don't care how much money the state has, we're going to be continuing to go down the same path.

Statement was made that this amendment is living in the moment, looking at just this year's budget. Mr. President, it's time that we pull our heads up and examine the forest for the trees. We're looking at the dollar figures in front of us as trees. Well, we're missing the whole forest, which is that the structure is broken and driving us to a place where people are leaving the state.

What this amendment does is it pulls us back. It reminds us that there are bigger issues going on than just the dollar figures in this budget. That's the opposite of living in the moment. And yeah, this amendment, as I said, I'd be willing to support a sales tax if this amendment passed.

And there was expressed an unwillingness to have a broad-based tax.

Funny thing is, Mr. President, the people that we have in this state that are leaving are leaving to states that have broad-based taxes. So that tells me that there's— whether or not you have one is not the only problem. It's how it's structured. I'd be happy to sit down with any member here about some of the different states and how they may have a broad-based tax on the books, but it's structured in such a way as to discourage growth in their states. And some, some states have broad-based taxes and have them structured in a way to encourage growth.

Statement was made about bills that were introduced to lower spending. That's great. I want to see more of those. My question is, where do we have the incentive to pass them? Because unless you're the one paying for it, you don't have a whole lot of incentive incentive to cut down on the spending.

Statement was that our kids end up losing. Mr. President, our kids are already losing. Our kids are losing because our structure does not give us the incentives we need to give them a proper education. Our kids are losing because once they're out of school, we don't have the jobs they need to stay here.

I got 5 kids of my own. My oldest is turning 14 tomorrow. Gonna be starting high school next year, and my question is, is when she is done with school, whether that's high school or college, is she gonna have a job where she can stay in this state, Mr. President? Changing the structure is what we need to make those jobs grow rather than shrink. There's a comment made about being honest with our constituents, and I agree, that is a problem.

If you look at the polls from around the state, the average Alaskan wants 3 things when it comes to our budget. They want high spending, they want no taxes, and they want a full PFD. That doesn't work, I know that. And anybody around here should be honest and know that that doesn't work. And that's why I'm laying it out, Mr. President, that I am willing to work on a fiscal plan that actually works.

I'm not trying to throw this amendment out there as a pie in the sky. I want something that works, that changes our structure, Mr. President. Question about things around here falling apart. Agreed, they are falling apart. They have been falling apart for a long time, Mr. President.

Even going back to our last time period when we had quite a bit of money floating around here, 2006 to 2014-ish. Mr. President, as I said, yeah, we put some money— I know we put some money into deferred maintenance at the time. We also put some money into AstroTurf football fields. It's an interesting set of priorities. And then we still had maintenance that dates from that time period that we didn't get to when we had that money.

It's not a— again, it's not a question of the dollar figures. It's a question of priorities. A statement was made that oil used to fund 90% of our budget. Yeah, it did. And that's the problem.

Because that was the mistake that we made, was relying on that one source that— not only is it a single source and a highly volatile source, but we relied on that one source that completely and totally disconnects the people, the budget, the state. From each other.

We have to fix that problem. If all we wanna do is vote back— vote in more oil taxes, well, in my mind, that's effectively the same thing as, you know, trying to take a shot of vodka to get rid of a hangover. It's a short-term solution at best.

So, yes, my support for a fiscal plan like this is coming a little bit late in the session. I recognize that. As I said, I had hoped that we would have made some progress by this point already.

I do want us to have a full fiscal situation that is fixed, but our problem again is not primarily a dollar figure problem, it's a structural problem. And so we need all those structural pieces to move. Like I said, they've been introduced. Most of them were introduced last year. By a couple of different members here on the floor.

But until we're willing to have that larger fiscal situation discussion, we're just going to keep going down this same road. Our economy is going to be in the doldrums, our people are going to keep leaving, and at the heart of the matter is the revenue source that we have chosen to fund our state. Which in this case is the permanent fund, which is what this amendment is trying to highlight, to try to bring forward, to recognize that this is an untenable situation, that we are already in a place where we're slowly sliding to where the dividend is going away. Probably would've gone away this year if it hadn't been for some certain things happening in the Middle East. Thank you, Mr. President.

So we talk about wanting to preserve the dividend for the future. The question is what actions are we willing to do to do that? I haven't seen a whole lot of those actions in the 6 years that I've been here so far, Mr. President. I'm willing to commit to those actions and that's what this amendment is about. Thank you.

Thank you, Senator Myers. Is the objection maintained? If you are ready for the question, the question being, shall the Senate adopt Amendment Number 4? Senators may proceed to vote.

The Secretary will lock the roll. Do any Senators wish to change their vote? And the Secretary will announce the vote. 3 Yeas, 17 nays. And so by a vote of 3 yeas to 17 nays, Amendment Number 4 has failed to pass the Senate.

Brief at ease.

Okay, will the Senate come back to order? Madam Sec— um, Madam— we'll go to Senator Giesel first. Mr. President, I move and ask unanimous consent that Senator Rauscher be shown as excused and not subject to a call of the Senate. Without objection, so ordered.

Thank you, Senator Giesel. Madam Secretary, there's an amendment number 5 by Senator Hoffman on members to the Senate desk. Thank you. Senator Hoffman. Thank you, Mr. President.

Before I get into the 4 amendments that I have, you might notice that amendments 5, 6, and 7 are in a different format that we're trying out. The bottom section is for informational only, and we're going to recommend that to the next Legislature that they utilize this format. It is not enforced today. And I might reflect that amendments 1, 2, and 4 were in the language section, but section 3 would have fallen under this process and we would have had the information listed below the line, but that was not the case. So I wanted to point that out so that many times we have amendments that they may or may not have the backup, adequate backup, and alleged finance will be required to give us explanation of exactly what the amendment does in the second half of the bill.

So with that, Mr. President, I move Amendment Number 5. Thank you. Amendment Number 5 has been moved, has been objected to. Senator Hoffman to explain. Amendment Number 5, as you look down the bottom half of the informational sheet, it explains that this is in the agency of Public Safety, Victims Assistance, Violence Crime Compensation Board, and it is for personal services of $28,300 and grants to organizations that provide domestic violence assistance for $563,700.

As I said, these are general funds that replace the— and replace reduced restorative justice funds used in the capitalization of the Violent Crimes Compensation Fund. The Violence Crimes Compensation Board uses this fund to provide financial assistance to victims of violent crimes as a payer of last resort for expenses not otherwise covered by insurance, restitution, or other available resources. I recommend a yes vote. Thank you, Senator Hoffman. Is there further discussion?

Is the objection maintained? Further discussion, Senator Steadman. Yes, I raise the objection, Mr. President. I'd just like to take a quick note. You know, you do the crime, you do the time, and you lose your dividend.

And what's happening with the reduction in the dividends over the years is in the restorative justice program, the victims then end up having less funds because there's less permanent fund dividends secured from the criminals. And in doing the budget, we've got lots of moving parts, and this is one of the moving parts that stuck out in the end, that we should really reconsider the impacts of the declining dividend on our victims. So this amendment would backfill backfill those funds that would have normally been collected from a higher dividend, um, that the criminals didn't get and put in to help the victims. So what we're doing here, Mr. President, is we are backfilling these funds to help the victims because of the shrinking dividend. And with that, Mr. President, I remove my objection to the adoption of the amendment.

Thank you, Senator Steppen. Is there any further objection? Seeing none, Amendment Number— Amendment Number 5 has been adopted.

Madam Secretary, there is an Amendment Number 6 by Senator Hoffman on members' desks. Thank you, Mr. President. I move Amendment Number 6. Thank you, Senator Hoffman. This amendment comes late in the process from the administration.

This partially funds the Office of the Governor late request related to smooth conduction of the 2026 statewide primary and general elections. It adds $650,000 in general funds for election security equipment. Upgrades, community emergency ballot, and prepaid envelopes. I recommend a yes vote. Thank you, Senator Hoffman.

Is there further discussion? Is there objection? Hearing no objection, Amendment Number 6 has been adopted. Madam Secretary, there's an Amendment Number 7 by Senator Hoffman on members' desks. Thank you, Senator Hoffman.

Brief at ease. Brief at ease.

Please, Senator Hoffman, an explanation of Amendment Number 7. I reluctantly offer Amendment—. Move Amendment Number 7.

The amendment— Last year we included funds for special sessions in this year's operating budget, which was reduced. As a result, the governor also reduced that appropriation in his veto process. In FY26, enacted budget had $250,000 for special session expenses. In August, a special session costed $367,000. This amendment adds an estimated cost for a 30-day special session of $1 million.

This is a supplemental request. Thank you, Senator Hoffman. The objection has been removed. Seeing no further objection, Amendment Number 7 has been adopted. Madam Secretary.

There is an amendment number 8 by Senator Hoffman on members' desks. Senator Hoffman, to explain. Yes, Mr. President, I move amendment number 8. And there has been an objection. Thank you.

This is a technical amendment from Ledge Finance that corrects the amount going to pay for teachers' retirement. Systems Unfunded Liability. The amendment reduces the amount by $180,000 to match the amount recommended by the Alaska Retirement Management Board for the Teachers Retirement System's unfunded liability. [Speaker:CHAIR] The objection has been removed. Hearing no further objections, Amendment Number 8 has been adopted.

Madam Secretary, I have no further amendments. That brings the bill back before the Senate in third reading on final passage. Brief at ease.

Will the Senate come back to order, please? Secretary has announced that we have no additional amendments. We are now back in third reading. Senator Hoffman to carry the bill.

Thank you, Mr. President.

This budget presents fiscal discipline, addresses energy relief for people of Alaska, and is a common sense governing budget. First, fiscal discipline. The Senate's operating budget, when combined with the spending agreements for the capital budget, balances at $70 a barrel oil for with $46 million left over for supplementals next year. We are treating the spike of oil as a windfall, a budget item conservatively, and building the reserves. There, at the beginning of this fiscal year, FY26, there was $3.5 billion in the constitutional budget reserve account.

The other body's budget, when combined with spending agreements for the capital budget, has close to $320 million in deficits at $75 a barrel oil. In short, Mr. President, we have a budget that accounts for wild swings in the price of oil, leaving money on the table to take care of supplementals next year. The other body's budget requires a draw of the Constitutional Budget Reserve Account of over $300 million. This budget does not. In energy relief for individuals, for communities, and for school districts, it addresses trying to ease the high cost of energy as a result of the war.

A $150 Energy relief payment is added to the PFD base of $1,000. Uh, a full $30 million payout to community assistance next year fills up the community assistance fund with $90 million, so there will be a full $30 million payout in FY28. Additionally, the base, base payment of $20 million to communities to help with high cost of fuel and shipping is included in this budget. Finally, for school districts that are facing these high costs of fuel costs, the school districts are including grants of $29.1 million to help with high cost of fuel. We looked at each school district's highest cost of energy over the past 3 years, took the highest amount and added 30% to that number.

And that amount for each school district totals $29 million. Common sense governing, Mr. President. The Department of Corrections has been one of our fastest growing areas of government. We funded an independent third-party study to identify, evaluate, and analyze the primary cross— cost drivers within the Department of Corrections. That total study is for $650,000.

This should provide data to help the next governor and the legislature make informed decisions to get a handle on the Department of of corrections growth. Base Student Allocation Study, $400,000, with the help of the next administration and legislature, with information decisions, decision-making when considering investments in education.

This budget fully funds the Alaska Retirement Management Board Recommended for PERS and TRERS of $38 million. Funds a 5-year average for wildfires at $60.6 million. Invests more than the 5-year average for the disaster relief at $48 million. For the first time, Mr. President, it includes reverse sweep language. Why are we including this language for consideration?

It makes sound fiscal— it's a sound fiscal management decision. The reverse language sweep added less than $8 million. Less than $8 million are swept into the CBR But many, many days and weeks were added to the accounting work to close out each of those subfunds. Getting the votes of the reverse sweep will speed up the comprehensive financial report, and this will give the Department of Administration and the legislature much-needed information to make those financial decisions. In summary, Mr. President, education funding, the House used FY27 funds of $147.6 million to the BSA as a one-time grant and $10.7 million to the People Transportation as a one-time grant for a total of $58.5 million.

The Senate uses $111 million of the FY '26 funds to the BSA as a one-time grant, plus the $29.1 million that I had mentioned for school districts for energy relief. That total is $140.1 million.

Because of the war in Iran, fuel prices have spiked, causing a great financial burden across the state of Alaska. To help address these, we've included what we could in this budget to address energy relief for individuals, school districts, and communities. In addition to the $1,000 PFD, we've added $150 in energy relief payments for FY26 revenue of $96 million. We've included the $29.1 million in FY27 to outgoing grants to school districts to help defray high cost of fuel. And we've doubled the FY27 base payment of $20 million for community assistance to help communities across the state of Alaska address how they may utilize those funds to alleviate their high costs of energy.

With that, Mr. President, I submit the budget to the body for, for support to provide the services that the citizens of the state of Alaska have come to expect. Thank you, Mr. President. Thank you, Senator Hoffman. Is there further discussion? If you are ready for the question, the question being, shall Senate CS for CS for House Bill 263 Finance, as amended in the Senate, pass the Senate?

Senators may proceed to vote.

The secretary will lock the roll. Do any senators wish to change their vote? The Secretary will announce the vote. 17 Yeas, 3 nays. And so by a vote of 17 yeas to 3 nays, Senate CS for CS for House Bill 263 Finance as amended has passed the Senate.

For the CBR vote, Madam Majority Leader. Mr. President, I move the constitutional budget reserve section of the bill. Thank you. Is there discussion?

Seeing none, are you ready for the question? Question being, shall the Constitutional Budget Reserve Section pass the Senate? Senators may proceed to vote.

Senator Hoffman, the Secretary will lock the roll. Do any Senators wish to change their vote? The Secretary will announce the vote. 17 Yeas, 3 nays. And so by a vote of 17 yeas and 3 nays, the Constitutional Budget Reserve Section has passed the Senate.

Madam Majority Leader. Mr. President, I move and ask unanimous consent that the vote on the bill be considered the vote on the effective date clause. I think you're hearing no objection. The effective date clause has been adopted.

Madam Secretary.

Senate Concurrent Resolution number 23, suspending rules 24C, 35, 41B, and 42E, Uniform Rules of of the Alaska State Legislature concerning House Bill Number 263, making appropriations for the operating and loan program expenses of state government and for certain programs, capitalizing funds, and making supplemental appropriations before the Senate final passage.

Abrevediz.

Come back to order, please. You have the title change before you. Are you ready for the question? The question being, shall the title change resolution SCR 23 pass the Senate? Senators may proceed to vote.

The Secretary will lock the roll. Do any Senators wish to change their vote? The Secretary will announce the vote. 20 Yeas, 0 nays. And so by a vote of 20 yeas to 0 nays, the title change resolution SCR 23 has passed the Senate.

Madam Secretary, please read the next item on today's calendar.

Senate CS for CS for House Bill 265, Finance. An act making appropriations for the operating and capital expenses of the state's integrated comprehensive mental health program and providing for an effective date. Before the Senate in third reading, final passage. Senator Hoffman. Thank you, Mr. President.

The primary change in the mental health budget adds $5.15 million to the Homeless Assistance Program to match the Mental Health Trust recommendation that was not recommended to the legislature by the governor. So we've, we've included the $5+ million for the Homeless Assistance Program. It also includes language to use existing Medicaid resources to increase the rate per service increments for private duty nurse services from $20 to $30, for registered nurses from $18.75 to $26.25, for licensed practical or vocational nurses. We also have language there approving the PSEA contract for the Department of Public Safety and Department of Transportation Facilities. I urge a yes vote.

Thank you, Senator Hoffman. Is there discussion? Seeing none, are you ready for the question? The question being, shall Senate CS for CS for House Bill 265 Finance pass the Senate? Senators may proceed to vote.

The secretary will lock the roll. Do any senators wish to change their vote? The secretary will announce the vote. 20 Yeas, 0 nays. And so by a vote of 20 yeas, 0 nays, Senate CS for CS for House Bill 265 Finance has passed the Senate.

Effective date clause, Madam Majority Leader. Mr. President, I move and ask unanimous consent that the vote on the bill be considered the vote on on the effective date clause. Hearing no objection, the effective date clause has been adopted. At this point, under UR 43B, I am waiving engrossment on all bills transmitted to the House today. Madam Secretary.

CS for House Joint Resolution number 32, Health and Social Services, by the House Health and Social Services Committee. Expressing commitment to the Rural Health Transformation Program, acknowledging the critical health care challenges facing rural areas of the state, and urging action by the governor and the Alaska delegation in Congress to continue to advocate for the state's interests and advance the Rural Health Transformation Program. The Health and Social Services Committee considered the resolution. Previous zero fiscal note. Signing do pass.

Senator Dunbar, chair. Senator Giesel signing no recommendation. Senator Myers, Tobin. I have no amendments.

Is there discussion? If you are ready for the question, then brief at ease.

Seneca back to order, please. Upset a few people on the floor. So this resolution We'll advance to third reading on our next legislative calendar. Madam Secretary.

House Joint Resolution number 38 by Representatives Hall, Eichide, Mears, Story, Josephson, Galvin, Freer, Stutes, Schraggy, McCabe, urging the United States Congress to recognize public safety telecommunicators as first responders and urging the United States Congress to pass the Enhancing First Response Act. The Labor and Commerce Committee considered the resolution, previous zero fiscal note, signing do pass. Senator Bjorkman, Chair, Senators Dunbar, Gray-Jackson, signing no recommendation. Senators Merrick, Yunt. I have no amendments.

Thank you. This bill will— as a resolution will also advance to third reading on the next legislative calendar. Madam Secretary, please read the next item on our calendar. House Joint Resolution Number 45 by the House Education Committee urging the United States Congress to fully fund the Individuals with Disabilities Education Act. The Education Committee considered the resolution, previous zero fiscal note, signing do pass.

Senator Tobin, Chair, Senators Bjorkman, Stevens. I have no amendments. Thank you. This resolution will advance to third reading on our next legislative calendar. Madam Secretary, please read the next item on today's calendar.

There is a special order of business citation calendar on members' desks. Madam Majority Leader. Mr. President, I move and ask unanimous consent that the Senate take up the special order of business citation calendar. Hearing no objection, the special order of business citation calendar is before the Senate. Madam Majority Leader.

Mr. President, I move and ask unanimous consent that the special order of business citation be approved. Hearing no objection, the special order of business citation is approved. Madam Secretary. There are no further items for consideration on today's daily calendar.

Thank you. Is there unfinished business at this time? Senator Giesel. Mr. President, I move and ask unanimous consent to be shown as a cross-sponsor to House Bill 210, Workers' Compensation Coverage for Occupational Disability Benefits. Thank you.

Without objection, so ordered. Along with, uh, Senator Gray Jackson. Senator Giesel. Uh, Mr. President, I move and ask unanimous consent to be shown as a co-sponsor for Senate Bill 200, uh, agriculture property tax deferral.

Thank you. Without objections. Do you want to add to that, Senator Cronk? All right, Senator Cronk will add to that, as well as Senator Kaufman, uh, Senator Rauscher, and, uh, Senator Tilton. All right, uh, Senator Young.

Thank you. I move and ask unanimous consent to be added as a co-sponsor to Senate Bill 174 Invasive Species. Thank you, Senator. You'll be shown there. Any additional unfinished business at this time?

Are there committee announcements?

Yes, please go ahead, Senator Dunbar. Thank you, Mr. President. Today's Health and Social Services Committee meeting is canceled. Thank you, Senator Dunbar. Additional committee announcements?

Seeing none, are there other announcements? Seeing none, are there special orders? Seeing none, Madam Majority Leader. Mr. President, I move and ask unanimous consent that the Senate stand in adjournment until 10:30 a.m. tomorrow. That's Friday, May 8th, 2026.

Thank you. Hearing no objection, the Senate is adjourned.