HOUSE BILL NO. 284 "An Act relating to the Multistate Tax Compact; relating to apportionment of income to the state; establishing a state sales and use tax; relating to taxes levied by cities and boroughs; relating to the corporate income tax; authorizing the Department of Revenue to enter into the Streamlined Sales and Use Tax Agreement or substantially similar agreement; relating to the oil and gas production tax; establishing an infrastructure maintenance surcharge on oil; establishing a pipeline corridor maintenance fund; and providing for an effective date." Co-Chair Foster recognized Representatives Julie Coloumbe, Justin Ruffridge, and Bill Elam in the room. He asked the Department of Revenue (DOR) to provide a presentation. He asked members to hold questions to the end of each section of the presentation. 9:09:21 AM JANELLE EARLS, ACTING COMMISSIONER AND ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT OF REVENUE, introduced herself and her colleagues. She introduced a PowerPoint presentation titled "HB 284 Tax Compact; Sales Tax; Oil and Gas Tax: House Finance Committee," dated February 5, 2026 (copy on file). She briefly highlighted the presentation overview on slide 2. The presentation would address policy goals, each component of the bill, and time permitting the fiscal note and sectional analysis. She turned to slide 4 and reviewed the governor's fiscal plan: Governor's Policy Goals • Provide a plan for fiscal stability, especially during the next five to seven years where budgetary challenges are expected • Limit spending to ensure a predictable PFD, ensure fiscal restraint, and prevent greater taxes from being implemented • Improve Alaska's long-term appeal for families and businesses by enshrining a 50/50 PFD and eliminating corporate income tax to make the tax climate more competitive for business investment • Improve the efficacy of state agencies by requiring reviews and reauthorization of agency operations on a regular basis Acting Commissioner Earls noted that slide 5 showed the fiscal plan in more detail. She turned the presentation over to her colleagues. 9:11:09 AM Representative Stapp looked at slide 4 that aimed to articulate the policy objectives of the proposal. He thought it would be interesting when going through the bill to determine whether or not aspects of the bill actually did so. He referenced bullet point three to improve Alaska's long-term appeal for families and businesses. He failed to see how enshrining a liability that outstripped the amount of revenue being raised in taxation would create anything but more instability and a need for more taxes. He looked forward to hearing the answer throughout the process. 9:12:12 AM BRANDON SPANOS, ACTING DIRECTOR, TAX DIVISION, DEPARTMENT OF REVENUE, moved to slide 7 and provided the omnibus tax legislation overview. There were three primary components of the bill: • Sales and Use Tax o Seasonally adjusted tax rate o Effective CY 2027 2033 (seven full years) • Corporate Income Tax o Market-based sourcing effective CY 2027 o Zero tax rate effective CY 2031+ • Oil and Gas Production Tax o Minimum Tax Floor increased CY 2027-2031* o Infrastructure Surcharge effective FY 2027+ Mr. Spanos elaborated that the bill would update and eventually eliminate the corporate income tax. The bill would raise the minimum oil and gas production tax floor from 4 to 6 percent and would add a new fee for pipeline corridor maintenance. He advanced to slide 9 and discussed the sales tax, which was the largest portion of the bill because it would require new statute. The tax rate would be 4 percent for half of the year and 2 percent for the other half. The bill created certain exemptions, which he would cover later in the presentation. The bill would require the state to administer the tax, which he would cover later in the presentation. The bill provided for a timely filing allowance of the lesser of 1 percent of tax or $75 [per month] for the seller for the burden of collecting and remitting the tax to the state. Mr. Spanos turned to slide 10 titled "Sales and Use Tax: Who Pays?" The tax was on the consumer/purchaser and was collected and remitted to the state by the business that sold the product or service. He explained that state sales taxes were deductible from federal income tax, for those who itemize. He addressed slide 11 titled "Sales and Use Tax: What is a Use Tax?" He detailed that a use tax was a complementary tax to a sales tax where tax would be charged on an item brought into Alaska that was not taxed at the time of purchase in another state. He elaborated that when the sales tax applied the use tax did not and vice versa. The tax only applied to sales. He expounded that the use tax used to be primarily for online sales, but online sales were mostly taxed currently after the Wayfair Supreme Court decision. In the past, states applied the use tax to online sales, but it was on the honor system and it had been hard to collect the taxes. At present, states primarily captured things like vehicles, while other items were still on the honor system. The bill would require individuals to pay the tax when they registered their vehicle. Other major purchases brought in through customs were reported to the Tax Division and would be captured. Other things would have to be self-reported. 9:15:52 AM Mr. Spanos addressed slide 12 titled "Sales and Use Tax: Internet Sales." He explained that historically internet sales were not taxed by states unless the seller had a physical presence in the state. The situation resulted in a string of legal cases with the most recent being Quill Corporation v. North Dakota. He elaborated that up to 1992 most cross border sales were made via mail order. In 2000, physical presence was not as much of a concern for states and they started to question if the standard should still be applied given that most cross border sales had become internet based and computers made the burden of tracking taxes in various jurisdictions simpler. The Supreme Court's decision on Quill stated that a taxpayer and seller should not have to know the burden in the hundreds of jurisdictions it sold its goods into and because of that it was overly burdensome and they should not have to collect the tax at all and the burden should be on the individual resident to report and remit the tax. South Dakota challenged the ruling because online sales were prominent and modern computer systems allowed for simpler tracking and reporting. South Dakota started the "kill Quill" movement and it passed a law to challenge the physical presence standard and applied its sales tax to internet sales. The online seller Wayfair challenged the law. The case went to the U.S. Supreme Court, which overturned the precedent in the Quill case and ruled that as long as long as a state met three criteria, it could apply the sales tax to remote sellers with no physical presence in their state. The first criterion was that a company had to have substantial economic nexus with the state. He stated that HB 284 did that by having a threshold of $100,000 sales into the state, which the Supreme Court determined in South Dakota was a substantial nexus. Mr. Spanos addressed the second criterion that a state must apply nondiscriminatory standards to all sellers. He explained that the bill met the test by having only one sales tax that applied to instate and out of state sellers in the same manner. The third criterion was that a state must not impose undue burdens on interstate commerce by ensuring that the compliance process was reasonable and fair. He explained that the bill proposed to do so in the same way as South Dakota by having all sales tax administered at the state level. 9:19:20 AM Co-Chair Foster noted that Representative Bynum joined the committee. He added that questions would be held until the end of each section. Mr. Spanos moved to slide 13 "Sales and Use Tax: Administration." He detailed that taxes would be remitted to the state by the seller using the revenue online system that allowed the electronic filing of tax returns, electronic payments, and electronic communication with the Tax Division in a secure system. The state would administer the tax to be compliant with the Wayfair case. In the Wayfair case, the Supreme Court highlighted that the South Dakota system for administering sales and use tax was designed to minimize burdens in interstate commerce. One of the key factors was centralized administration. He elaborated that the court pointed out that South Dakota had a single state level taxing authority that handled state and local taxes, which meant the sellers had to register, file, and remit to one system instead of hundreds of local tax jurisdictions separately. The streamlined approach reduced compliance complexity and supported the court's finding that the law did not impose an undue burden on interstate commerce. He expounded that the court contrasted the approach with states with fragmented systems, which could create significant administrative challenges for remote sellers. He stated that South Dakota's centralized system was cited as being constitutionally sound under the Commerce Clause. Mr. Spanos advanced to slide 14 titled "Sales and Use Tax: Comparison to Other States." He relayed that the vast majority of states levied a sales and use tax. He detailed that at the 4 percent rate proposed in the bill, Alaska would tie with five other states as the second lowest tax rate in the nation. He noted that at the 2 percent tax rate, Alaska would be the lowest tax rate in the nation. He added that when combining the average local sales tax rates, Alaska would have the sixth lowest tax rate compared to other states. He stated that the broad base in the bill allowed for a low rate. Mr. Spanos turned to slide 15 titled "Sales and Use Tax: Exemptions." The intent was to have a broad tax base that applied to most consumer goods and services, allowing for one of the lowest rates in the nation. He stated that the governor deliberately excluded intermediate business transactions that could lead to "tax pyramiding." There could be multiple tax levels in the chain of a good as it made its way to a consumer. He explained that the bill structure was straightforward, beginning with the assumption that all goods and services were taxed and listing specific exemptions one by one. He detailed that the approach was administratively simpler than trying to define what was taxable from scratch. 9:22:27 AM Mr. Spanos moved to slides 16 through 17 listing specific sales and use tax exemptions. He detailed that most of the exemptions applied to areas where the state did not want to tax itself or were required by the federal government, or were exemptions that made sense such as employee wages that were usually taxed under an income tax rather than a sales tax. He referenced the exemption on jet fuel listed on slide 17 and explained that it went back to interstate and international commerce. He explained that states could not tax transporting goods from point A to point B for interstate or international commerce. The only thing a state could tax was fuel used in its airspace. The fuel used in international or interstate flights could not be taxed when used in interstate commerce; most of Alaska's flights were used for that purpose. Rather than having a complicated credit system to apply the tax only to the sale of fuel used in Alaska's airspace, the bill excluded jet fuel completely. He stated it was also excluded on motor fuel tax and jet fuel was excluded for different fees for things like the Spill Prevention and Response Fund (SPAR). 9:24:06 AM Co-Chair Foster thanked the department for the high level introduction of the sales tax portion of the bill. Representative Stapp stated that the Wayfair case also had a transactions test, which he believed was 200+ annual transactions. He did not see it outlined in the bill. Mr. Spanos replied that after Wayfair was decided, South Dakota wanted to ensure it would meet the standard; therefore, there were two tests. Most states currently only had one test. He shared that in conversations with those states they strongly recommended against using the transaction test because, for example, it was possible to sell 50 keychains into a state at a total cost of $50, and requiring the filing and remittance of a tax on the $50 was overly burdensome. He relayed that $100,000 was the current standard for most states. Representative Stapp looked at slide 11 pertaining to the use tax. He interpreted the slide to mean that the use tax could be applied on anything that could have been sold in Alaska including purchases made outside and brought into the state. He highlighted that many Alaskans purchased vehicles in Washington and brought them into Alaska. He asked what happened to the use fee on that type of purchase. Mr. Spanos replied that if a person purchased a vehicle outside the state the tax would be applied when they registered the vehicle in Alaska. Representative Stapp asked for verification that if the bill became law all of the individuals buying vehicles out of state would have to pay the 4 percent or 2 percent tax when they registered the vehicle [in Alaska]. He asked if the seasonal sales tax would be applied at the point of purchase or the point of registration. He remarked that there was a material difference between registering at 4 percent and registering at 2 percent. Mr. Spanos responded that the tax was paid at registration in most states because there were numerous sales made between unrelated purchasers that were not businesses; therefore, the states captured the tax by point of registration for vehicles specifically. However, he would have to look into the situation where a person purchased a vehicle at a dealership. He explained that some states may have a transaction there as well, but he believed almost all were at the Division of Motor Vehicles (DMV) level. 9:27:22 AM Representative Stapp remarked that the bill included exemptions for purchases made through WIC [Women, Infants and Children] and food stamps, but it did not exempt things that WIC was used for such as diapers and formula for people not in the WIC program. He stated his understanding that all of the items were currently taxed under the broad proposal unless they were purchased through WIC, food stamps, or another type of public assistance program. Mr. Spanos agreed. Representative Stapp referenced the policy goal to improve Alaska's long-term appeal for families and asked how the bill improved Alaskans lives when it taxed purchases of vehicles out of state, diapers, formula, and fuel (apart from jet fuel). Acting Commissioner Earls replied that the bill was the comprehensive fiscal plan the governor had put together. She stated that the plan still allowed for the PFD and a small share of sales tax. Representative Stapp pointed to the language on slide 4 specifying that the bill would improve Alaska's long-term appeal for families and businesses. He failed to see how taxing all of the aforementioned items would achieve that outcome. He understood there was more to the proposal. 9:29:39 AM Representative Galvin appreciated the conversation and that the governor put a proposal forward pertaining to revenue. She understood the fiscal cliff the state was beginning to face and the desire to keep Alaskans in the state safely on roads they could travel on and in schools where families wanted to spend their time. She looked at the sales tax on slide 9 and asked about the decision to call it a seasonal sales tax. She noted it was a year round tax. She remarked that it was not what most people thought of as a seasonal sales tax. She elaborated that typically some states used a seasonal tax when they knew there would be a large influx of visitors into the state and they wanted to ensure they were paying a little extra when spending their money on products. She asked for verification that Alaskans were being taxed year round by the proposal. Mr. Spanos stated he had the same concern when putting the presentation together. He had looked it up and there were states that had a rate that changed seasonally called seasonal sales taxes. He wanted to call it a seasonally adjusted rate, but there were states who referred to the tax as seasonal when it was seasonally adjusted. Representative Galvin thought it helped to call a tax by whatever it was that helped people understand what it was. She liked the suggestion of calling it a seasonally adjusted sales tax because it was a year round sales tax for all Alaskans. Mr. Spanos highlighted there was a slide that showed the 70/30 split when combining the rates. He noted that having a 4 percent rate during the tourist season reduced the tax burden on residents. Without the 4 percent rate, the split was 75/25. 9:32:41 AM Co-Chair Foster recognized Representative Jubilee Underwood in the room. Representative Galvin asked for comment on sales tax versus income tax. She stated that Alaska already had over 100 municipalities with local sales tax, which differed by community. She relayed that economists reported that historically sales tax had a larger impact on families with less nationwide. Additionally, regional price disparities in Alaska would disproportionately hurt rural residents if a statewide sales tax was implemented. She highlighted that the burden on nonresidents was substantially different, especially nonresidents who made over $200,000 working two weeks [and two weeks off] on the North Slope. She noted that the individuals went home [out of state] during their time off and paid income and sales taxes in their home state. She warmly welcomed the workers to continue coming, but she hoped there had been discussion about the topic. She asked why a sales tax was a better idea than an income tax. 9:34:48 AM Acting Commissioner Earls replied that there was no perfect tax regime. The sales tax would allow the state to collect from nonresident workers and tourists as well. She explained that the full burden would not reside on Alaska residents. Representative Galvin asked if there was evidence showing that nonresident workers came to Alaska and spent time and money in a way that would pour revenue into the state's revenue coffers. She observed that many nonresident workers flew straight to the North Slope and straight back from the North Slope. She was open to hearing data that showed otherwise. She wanted to see data showing the sales tax would capture revenue for the state compared to an income tax that would capture 2 or 4 percent of their income. She highlighted that the 2 or 4 percent was less than what nonresidents were paying back home. She pointed out that it would not result in the loss of workers and nonresidents would not be double taxed if there was an income tax. She did not know that 2 or 4 percent would result in significantly more funds under a sales tax versus an income tax. Acting Commissioner Earls would have to check to see if the department had the data. DAN STICKEL, CHIEF ECONOMIST, ECONOMIC RESEARCH GROUP, TAX DIVISION, DEPARTMENT OF REVENUE, responded that the department had some information about potential contribution to sales tax from nonresident workers. Broadly speaking, there were three groups of individuals who would be taxed including residents, tourists, and nonresident workers. Some of the nonresident workers were coming to Alaska for extended periods of time. He cited the tourism, fishing, oil and gas, and mining industries as examples. The model specifically broke out the share of revenue coming from nonresident workers and the department could provide it to the committee. Representative Galvin stated it would be helpful. She asked for a comparison between 2 and 4 percent of income versus sales. 9:37:54 AM Representative Bynum thought there would be many questions about the sales tax. He did not think the presentation would adequately convey to the committee and the public why the proposed tax was the desired route. He referenced the question by Representative Stapp about when the tax would be applied to vehicle registration. He wondered if Alaskans would all buy vehicles in the winter because they did not want to be subject to a 4 percent tax in the summer. He looked forward to the answer to Representative Stapp's question. He understood that one of the goals was to capture revenue from visitors. He stated that one of the things Institute of Social and Economic Research (ISER) had talked about in a presentation on the topic was using the sales tax mechanism to create stability because it was not as potentially volatile as other forms of taxation. He had asked ISER how it was being modeled and why it was modeled that way. He noted that in Alaska if the goal was to capture nonresident visitor revenue, that the opportunities were tied to the economic condition of the country. He highlighted that the volume of people coming to the state for travel may go down when the cost of travel increased or if there was economic instability. He reasoned that even if the number of visitors did not decline, spending habits changed. Representative Bynum shared that his community had a sales tax and the borough assembly closely monitored what was happening in its economy, which was highly influenced by tourism. The community had seen that a global pandemic eliminated all revenue coming in from a sales tax. He shared that he had asked ISER if it factored in the change in people's spending dramatically declined during periods of economic instability. He had been told no and that ISER's modeling was based on the U.S. as a whole. He asked for the department's perspective on the question. He asked if it truly created a stable income source for Alaskans that leveraged the visitor industries and people in Alaska temporarily. Alternatively, he asked if funding the tax would be placed on the backs of Alaskans. 9:41:54 AM Acting Commissioner Earls stated her understanding that Representative Bynum wanted to ensure the tax would not fully fall on Alaskans. She agreed that the [ISER] study did not take economic downturns into account. She was not entirely sure at present. Representative Bynum asked if those particular economic instabilities were not considered as part of the fiscal plan. Acting Commissioner Earls deferred the question to Mr. Stickel. Mr. Stickel stated he could provide a general perspective on the stability of state revenues. The state's current fiscal system had a lot of reliance on the oil and gas industry, which tended to be a very volatile revenue source to the state. He shared that when looking at other states with sales and income taxes, those revenue sources tended to be more stable than oil and gas. He relayed that when looking at other states, revenue from sales taxes was a little less volatile than income taxes in a downturn because income taxes tended to be heavily influenced by things like capital gains. He elaborated that when there was a big expansion or downturn it led to large stock market gains or losses, which resulted in income tax volatility. He relayed that a sales tax was generally viewed by economists and tax professionals as one of the most stable revenue sources. Representative Bynum referenced slides in the current presentation listing exemptions from the proposed tax. He asked if it would apply to local taxes. For example, his community had a borough and a city with borough and city taxes, a sales tax cap, a senior sales tax exemption, and items that were exempt and not exempt. His understanding was that the bill told municipal governments that existing exemptions would go out the window and the bill would provide the framework to apply the taxes. He asked if his understanding was accurate. Mr. Spanos responded that centralized administration and having the same exemptions across the board were standard in states doing their best to comply with the Wayfair decision. He relayed that because it was a new tax, the administration wanted to learn best practices from other states. He noted that if there were other exemptions the state wanted in general, they could be added to the bill. The governor started with a very broad base to have the lowest rate and there was nothing preventing the legislature from making changes. He elaborated that if there were certain items that were exempt locally that the committee or legislature wanted to exempt, it was an option that could be done. He noted that the tax rate would have to increase in order to hit the same revenue target. He stated that the department could model the number. 9:46:31 AM Representative Bynum asked if the administration took into consideration the impacts on the current tax structures of communities that were charging the taxes. There was already a cost from the state to organized boroughs. He had heard from presentations from the governor that if more people came to the state there would be a big burden on the state because services were being provided and it would not necessarily be good for the state. He would love to see his community grow. He pointed out that the services (e.g., roads, police, fire, and other services) were being provided by local communities through local taxes. He remarked that the sales tax provision in the bill discounted every measure that had already been put in place to provide services. He asked if the administration had evaluated the impact on communities that were already taxing their citizens to provide services. Mr. Spanos replied that it was the governor's plan and there was no perfect tax regime. He relayed that the proposal was the regime that the governor thought would be best for the state. The department modeled the impacts on the state. He deferred to Mr. Stickel to answer whether the models went down to the local level. The governor considered all options and landed on a sales tax as the best option for the state. Representative Bynum interpreted the response to mean that the administration did not consider or evaluate impacts to communities that were already collecting sales taxes to support the local communities. Mr. Spanos responded that the governor considered all options on the table and chose the current proposal. Representative Hannan asked about slide 14, which stated that the average local sales tax rate in Alaska was 1.82 percent. She asked how the calculation was done. She used Ketchikan as an example where most consumers would say the sales tax was 6 percent because there was a city and borough tax. She wondered if the rates were counted as two or combined when calculating the average. She asked Representative Bynum if the Ketchikan rate was 6 percent. Representative Bynum replied that the tax was 8 percent in the summer with a proposal to go to 8.5 percent. The bill would result in a sales tax of 12.5 percent in Ketchikan. Representative Hannan referred to slide 14 that specified the average sales tax in Alaska was 1.82 percent out of 100 jurisdictions exercising sales tax. 9:50:14 AM Mr. Spanos replied that he would follow up with the information. The 1.82 percent was from a reputable tax website that analyzed all of the states' sales taxes annually. The combined local rate was computed for all of the states and the states were ranked based on the results. Representative Hannan was interested to see whether it counted all municipalities. She considered the 1.82 percent average and thought it meant there had to be a lot of jurisdictions that only had a 1 percent tax, but she did not hear that from communities with sales tax. She referenced communities with a city and a borough tax, which looked like one tax to residents, but to the tax analysis it may appear to be two jurisdictions. She also wondered whether jurisdictions without a sales tax were included in the analysis. 9:51:43 AM Representative Hannan looked at slide 16 and noted that internet access was one of the exemptions. She asked if it meant the utility bill a person was paying to an internet provider. She asked about the definition of internet access. Mr. Spanos replied that the drafters included it because the federal government did not allow taxing individuals on accessing the internet under the Internet Tax Freedom Act. Representative Hannan asked if it would only apply to individuals but not businesses. She used a café providing internet access to its consumers as an example. She asked if businesses would still be taxed but individuals would have an exemption on the utility bill paid to a provider. Mr. Spanos responded that he would have to follow up on the question. 9:53:11 AM Representative Allard remarked that there was already a markup of about 20 percent in addition to a dealership markup for vehicles purchased in Alaska. She believed Mr. Spanos' earlier testimony to mean that if a person purchased a vehicle in Oregon where there was no sales tax and shipped the car to Alaska, they would have to pay sales tax when they registered the vehicle. Mr. Spanos nodded affirmatively. Representative Allard asked if a person would have to pay tax on a used vehicle they purchased out of state when it was registered in Alaska. Mr. Spanos clarified that it was not only out of state sales. He stated that all purchases without an exemption would be taxed by the local sales or use tax. He confirmed the tax would apply to a new and used vehicle. Representative Allard asked if she would be paying tax on everything purchased out of state like furniture and retail items. Mr. Spanos replied that there was an exemption for moving to Alaska and bringing one's household goods. However, the use tax would apply if a person went shopping and brought in goods, but it would be a self-reporting requirement. He noted that states had few mechanisms to enforce it. Representative Allard stated she was glad she was military because she would purchase everything including cars through the military PX [post exchange]. She referenced Representative Galvin's mention of income tax. She stated there were approximately 11,045 military retirees and 9,000 federal retirees. She noted that military retirees were 15 percent [of the state's population], which was the highest per capita in the nation. She asked if the department had researched how detrimental an income tax would be because of the loss of military individuals. She shared that when she came to Alaska almost 20 years back, Alaska was a high consideration because it did not tax federal income when it came to retirement. She wondered if the department had any way of countering an argument in favor of an income tax. 9:56:41 AM Mr. Spanos replied that he and Mr. Stickel had been with the division for a long time and had presented on income taxes, sales taxes, and other taxes over the years. He relayed that it had been a while since he had looked at income tax models. He deferred the question to Mr. Stickel. Mr. Stickel replied that broadly speaking there was no perfect tax. Any tax would have negative downsides, which was true for a sales tax or an income tax. The impact on population and decision to live in Alaska was one of the impacts of a tax, which was balanced against the positive impacts of having a sustainable fiscal plan. The impact had been modeled by DOR "in excruciating" detail and was covered in the ISER report as well. Representative Allard suggested that military retirees would likely cross Alaska off the list of places to retire if the cost of living increased due to an income tax and perhaps a sales tax. She stated that military and federal retirees brought a lot of funding into the state. She referenced the phrase "a bridge to nowhere" that was coined many years back. She felt like the sales tax was a bridge to income tax. She thought everyone needed to consider how to avoid it. Representative Bynum remarked that the bridge to nowhere was actually a bridge to somewhere and it was in Ketchikan. The community had a lot of hard feelings about that bridge. 9:58:42 AM Representative Tomaszewski had the same question as Representative Hannan about how the average sales tax had been calculated. He looked forward to the answer. He referenced the proposed 2 and 4 percent tax and wondered how to be assured the tax would not increase to 4 and 6 percent in another year or 6 and 12 percent in future years. He asked how easy it would be for the next legislature to increase the tax amount and what the ramifications would be on Alaskan citizens. Mr. Spanos responded that the legislature would have the ability to change the statutes. The governor recognized the difficult fiscal situation and wanted to have a conversation about how to solve it. He stated that the bill reflected the fiscal plan put forward by the governor in order to balance revenues with expenses. The governor believed that not doing so was the wrong thing to do. He agreed there would be concerns about years going forward, but when looking at the reality of the situation, the concerns were present already. Representative Tomaszewski asked if there was any consideration about how to make it more difficult for the legislature to raise the taxes next year. He asked if there was consideration into making it constitutional. Acting Commissioner Earls replied that the governor felt strongly that the state's fiscal status needed to be scrutinized all of the time. She stated that a fiscal plan, including a 10-year plan was hard to predict. The levers were available to increase or decrease the tax. 10:02:06 AM Co-Chair Josephson looked at the 1.82 percent average local sales tax rate in Alaska on slide 14 and was concerned that the average local sales tax rate must have considered the larger municipalities and Anchorage and Fairbanks with their zero rates because the mean should be closer to 5 percent or better. He stated while it could create an opportunity to raise lots of revenue for local governments because many had caps on purchases above $1,000 and $2,000; however, he believed local governments would fear the centralization of the exemptions. Additionally, the total tax rate would get so large at some point it would act as a deterrent for local economies. He asked if the administration had any concerns with those issues. Mr. Spanos confirmed that they had concerns. He stated that the governor would like not to have a tax as well, but it was not the situation the state was in; there was a fiscal crisis that needed to be resolved and the governor felt the proposal was the best solution at the time. The bill zeroed out the tax rate after seven years so the legislature could determine whether it was still needed. He suggested that with such a broad base tweaks would likely be needed sooner rather than later. The governor considered everything that concerned him because he did not want to ask for a tax either. He reiterated that the fiscal problem needed to be resolved. Co-Chair Josephson looked at the exemption shown on slide 17 on purchases in a trade or business when costs were deductible. He was concerned that a substantial amount of potential tax may not be captured because all of a business's purchases would be tax exempt. He asked how the department could assuage his concerns about the topic. Mr. Spanos answered that the intent was to not tax business to business transactions. He explained the intent was to have only one sales tax applied - at the consumer level - on business inputs that went into an item that was later sold. Additionally, the state already taxed certain industries on specific items such as oil, fish, and mining and the administration did not want to overburden the industries with additional taxes. Co-Chair Josephson remarked on Mr. Spanos's statement that the legislature could make exemption adjustments that make require increases [in the tax] to achieve the goal. He expressed that it was where he was most troubled by the entire proposal. He had experienced that the governor would object to changes to the legislation. He noted that Mr. Spanos made it sound like the legislature was welcome to engage in making adjustments, but he had not experienced the governor being open to changes to his legislation in the past. 10:06:51 AM Acting Commissioner Earls responded that it was open to some conversation. She could not speak to what the governor would accept, but she believed it was a conversation to be had. Co-Chair Josephson asked how the conversations would occur. He wondered if the conversations would occur like any other legislation where the legislature would speak to the department and the department would speak to the governor's office. Acting Commissioner Earls replied that the questions could come through the department and the department could speak with the governor. She offered to find out more information and follow up with the committee. 10:07:59 AM Representative Moore remarked that numerous members had spoken about the fears of double taxation on cities and boroughs that rely heavily on sales taxes already. She asked for more detail about how existing taxes would interact with the bill. She asked if it was a double taxation. Mr. Spanos answered that double taxation usually referred to an income tax where two states were taxing the same income twice. He explained that it was standard for local taxes to be added on top of a state level tax. He could not think of an example of a state that did otherwise. He detailed that the tax was only applied once to the same item. There was a state level tax in most states and some states had a cap that local governments could add taxes up to. He detailed that some of those were up to 11 percent at the local level on top of the state tax that was sometimes 4 to 5 percent, resulting in a high tax. He explained that it would be the case in some of Alaska's local communities that had a higher existing tax rate. For example, if a community had a 6 percent tax rate and a 2 percent tax rate was added at the state level, the community's tax rate would be 8 percent. Representative Moore asked if the department had modeled the household level impact of a sales tax particularly in rural communities where the cost of goods was already high. Mr. Stickel answered affirmatively. He noted that ISER had also done that type of modeling. He was happy to provide the information. Co-Chair Foster noted there were 20 minutes left in the meeting. He asked members to think about whether they wanted to extend the meeting. 10:10:59 AM Representative Galvin referenced ratings for the state. She recalled being told that a broad base revenue measure would likely improve the state's ratings. She stated it meant that for any dollars owed by the state, it would likely see a lower percentage owed on top of the amount. She asked how the bill would look to ratings agencies such as Moody's. She wondered if it would save the state money. Acting Commissioner Earls replied that she would have to follow up on the question. The state debt manager met with the rating agencies. She offered to follow up with the information. Representative Galvin asked for a statement about whether broad based revenue would look good for Alaska. Mr. Stickel answered that broadly speaking a sustainable fiscal plan would be viewed positively by rating agencies. The department anticipated it would be something that would favor positive ratings for state debt, which would save the state money. Representative Galvin understood the balance in the state's revenue had changed from 90 percent oil revenue; the revenue now fluctuated much more because of price. She remarked that the state was needing dollars that were easy to spend for services. She stated that the investment fund was doing well, but the other piece of revenue was not yet in place. She highlighted that rating agencies found favor in states that had something in place as a safety measure should there be a need for steady revenue. She thanked the department for presenting the bill because a broad based measure was important. She considered the multiplier effect and highlighted other committee members' discussion of their concerns about piling on taxes. She considered the 1.2 million cruise ship passengers and noted there had been conversations about adding another head tax to generate some revenue. She heard from cruise companies that adding another $1 may result in a loss of many passengers. She wondered about the possible negative multiplier effect of adding tax that would impact tourists. 10:15:33 AM Mr. Stickel responded that the department had looked at macroeconomic modeling similar to modeling by ISER, which gave the ability to look at relationships between data and understand how a change in tax was likely to impact variables like visitation and spending. He stated it was one tool in the toolkit that should be viewed alongside input from stakeholders. One of the things the models sometimes missed and could not perfectly quantify was the impact on the business and investment climate. Representative Galvin clarified she understood that any head tax on cruise ship passengers had to go directly to something related to the cruise ship industry. She highlighted that adding extra cost to any visitor may have a negative effect on the number of visitors coming to Alaska. She suggested perhaps the Alaska Travel Industry Association (ATIA) could weigh in on how taxing visitors at the local and state level may impact travel. 10:17:31 AM Co-Chair Foster noted that the meeting would be extended to 11:00 a.m. Representative Stapp referenced the policy pertaining to planned noncompliance for failure to self-report. He elaborated that if a person brought in goods, the state had no mechanism for enforcement. He remarked that it would result in Alaskans circumventing the law either knowingly or unknowingly. He thought that the presentation made it sound like noncompliance for payment was in the plan. He asked if the state was planning for active noncompliance. He asked if there would be any legal repercussions for Alaskans or enforcement mechanisms when they would be breaking the law. 10:19:08 AM Mr. Spanos clarified he had been referring to what he had heard from other states that noncompliance existed. There was noncompliance in the current taxes and the state took action where it could. He noted the department had talked about [tax] related bills with the committee in the past including the vehicle rental tax. He detailed as the tax administrators, the division was obligated to enforce the taxes. He stated that the division enforced the laws when it knew about noncompliance and where it was. Representative Stapp understood that noncompliance existed, but the department was the enforcer and Alaskans who did not report items they purchased and brought to Alaska would be in violation of the law. He asked about the penalty for noncompliance and how it was enforced. He wondered if there would be random checks on vehicles crossing the border to see if individuals purchased things they needed to pay tax on. Mr. Spanos replied that AS 43.05 included the general tax penalties that would apply to the proposed new taxes as well. There was a failure to file/failure to pay penalty of 5 percent per month up to 20 or 25 percent. He would have to double check the maximum percentage. Representative Stapp stated he was glad to know that if the bill passed people needed to comply otherwise it would be an extremely expensive piece of furniture if a buyer had to pay the noncompliance tax. He referenced an earlier statement by Mr. Spanos that the executive would like not to have taxes as well, but that the fiscal situation demanded it. He did not see that in the bill. He saw that the bill created a constitutional liability that was far greater than the revenue measures proposed. He asked why the proposal was needed and what its purpose was when it cost more than it raised. Mr. Spanos responded that the governor's overall fiscal plan wanted to maintain a 50 percent PFD to residents as well as close the budget gap that existed on paper. The proposed fiscal plan included taxing in order to help close the gap. Representative Stapp countered that the proposal did not close the budget gap by the department's own projections. He asked if the proposal closed the gap by constitutionalizing the liability by the department's own 10-year projections. Mr. Stickel referenced a handout prepared by the Office of Management and Budget (OMB) titled "Governor Dunleavy's Fiscal Plan: Comparative Modeling Scenarios," dated 1/26/26 (copy on file). The department prepared a comprehensive fiscal model that used the governor's 10-year plan as a starting point and layered on numerous levers around state revenue and spending. The plan included an initial draw from savings in FY 27 when the state would work to implement the new revenues, but beyond FY 27, the plan was roughly in balance. 10:23:32 AM Representative Stapp stated it was the case until the sunset of the revenues and the payment was constitutionalized. He remarked that in 10 years when the revenues sunset, the liability would always be there. He asked how it would balance. Mr. Stickel replied that DOR's fall revenue forecast had lower revenue projections for the coming five to seven years. Once production from the Willow and Pikka oil fields started to come online and once the fields graduated from being eligible for certain incentives that applied for first several years of new oil production, the department was expecting a higher baseline revenue outlook. The department also had an assumption for growth in the Permanent Fund, which led to a higher percent of market value transition. Additionally, the administration was very optimistic about a gas pipeline coming online and the modeling layered on the assumption of revenue from the AKLNG [Alaska Liquified Natural Gas] project starting in the 2030s. The baseline revenue combined with the other elements of the fiscal plan roughly balanced even as the sales tax and corporate income tax expired. Representative Stapp asked that if all of those things took place, there would be a ~$1 billion liability in perpetuity, the taxes would go away, and the gasline and production would net at least another $1 billion. Mr. Stickel replied it was the assumption. He added there was uncertainty around any forecast and any model. Co-Chair Foster explained that HB 284 was the tax component of the governor's fiscal plan. The governor also had a spending cap bill and a bill related to the split of the Permanent Fund earnings. He planned to let the Alaska Municipal League speak prior to going to the next section of the bill. 10:26:39 AM Co-Chair Schrage thanked the presenters for being present and believed they had the unenviable position of advancing a major fiscal policy change, which everyone admitted was incredibly difficult. He believed the conversation was important. He thought the challenging questions asked during the meeting were fair. He noted there were many concerns with the bill and he believed it would take substantial time to work through the bill. He thought there were many concerns with the proposal that needed to be worked through. He considered the challenges the status quo and remarked that the committee had not spent any time talking about the challenges associated with the status quo. He stated that one of the opportunities presented in the next several years was potentially a gasline. He believed the governor did a fairly good job of articulating the concern that if the state had a gasline or other major investment, it would result in a huge influx of people into the state and an increased burden on state services. He asked to hear how implementing a fiscal policy like the one proposed would allow the state to restructure the way it funded the size and scope of government and how it would enable the state to be more flexible to major positive developments in Alaska in the near future. Mr. Stickel responded by looking at the status quo and the governor's 10-year plan associated with the release of the FY 27 budget and the DOR fall 2025 revenue forecast. He explained that oil prices were lower and revenue forecasts had been decreasing. There was cost pressure on various elements of state government. He stated that if it was assumed that the revenue forecast held and the state paid a dividend in line with the governor's proposal and government was funded at a fairly stable level, the Constitutional Budget Reserve (CBR) would not last for long. He elaborated that one of the slides the department presented showed that the state would be able to make a CBR draw in FY 27 and FY 28 and then it would be depleted. There was a structural fiscal issue that needed to be addressed. He stated that as far as the broader questions around the issue, it created uncertainty. He expounded that something would eventually have to happen, but people did not know what (i.e., it was hard to make plans and businesses did not know what would be decided). There was a benefit to having some sort of certainty. He stressed it was very difficult to quantify. He noted that employees at the Department of Labor and Workforce Development and ISER had tried to quantify it. He stated that one element was that solving the fiscal system provided some level of certainty to underpin long-term decisions that individuals and businesses were making. 10:30:44 AM Co-Chair Schrage believed the state had been facing the fiscal cliff for quite some time. He remarked that some would say the challenges had been evident for more than a decade. He shared that in his experience talking with community, businesses, and other stakeholders, the instability had a very negative impact on investment in Alaska and in public confidence in the state, which he believed was witnessed in some of the outmigration currently occurring. He recalled when Mouhcine Guettabi was with ISER in the past and one of the challenges he discussed was the large outflow of money generated in Alaska and going elsewhere. He referenced another committee member's discussion about the prospect of taxing sales occurring outside of Alaska. He asked about the impact of dollars spent in Alaska compared to the impact of spending the money outside the state without any tax mechanism to capture some of the money. Mr. Stickel answered that Alaska tended to have a fairly transient population and it relied heavily on outside companies and workers in some of its industries. Additionally, students liked to go out of state for college to get some sun during the winter. He noted that the things resulted in money flowing in and out of the state. The sales tax would not apply to money that Alaskans spent outside Alaska, but it would generate some revenue from the sales of outsiders spending money in the state. Generally, in the analysis DOR looked at pertaining to spending and employment, it tended to be that outsiders were spending more in state than in-state residents were spending out of state and putting in a broad base tax would be a net positive for the state in terms of the relationships of where money was being spent. 10:33:31 AM Co-Chair Schrage stated there were tradeoffs with any policy choice in Alaska. He remarked that there were numerous concerns about the bill and its structure that would have to be worked through. He believed the economic instability facing the state including the negative public and business confidence, outmigration, and outflows of money going to other states, were all challenges that could be partially mitigated or addressed through fiscal reform. He thought it was an important conversation to have. He highlighted the importance of remembering there were ways to improve the state's fiscal structure. He was not certain the current proposal was the way to do it, but it was a conversation that needed to continue. Representative Bynum referenced the undertone about affordability in the state. He relayed that the biggest outmigration from his community was due to the cost of living. He looked at slide 4 that specified the goal of creating long term appeal for families and businesses by enshrining a predictable 50/50 PFD. He observed that the PFD was major component of the governor's proposal. He stated that some of the arguments he had heard was that enshrining the PFD would offset the pain of paying additional taxes. He referenced the goal of trying to grow the community and highlighted there was nothing in the proposal to create stability in capital investment, build things, have people work through the building of things, or to make life easier for people by building and maintaining things. He stated that the bill taxed his community to ensure the enshrining of a PFD. He addressed the challenges with the concept. He addressed the goal of trying to grow his community and fill teacher, police officer, and firefighter jobs and explained that if the community was not growing from within it meant people were having to come to the community. He pointed out that the proposed tax would be immediately imposed on those individuals, yet they did not have the privileges of receiving a PFD because they had to wait. He stressed that individuals could be in Alaska for two years prior to seeing any kind of relief. He pointed out that on one hand the proposal created an enshrined PFD that would help Alaskans and on the other hand communities were shrinking and costs continued to rise. He did not see how to balance the situation to make it more affordable for his community to grow. He stated that the proposal did nothing in that regard. He asked if growing Alaska and keeping communities healthy had been considered as part of the calculus in the plan. He reiterated that the bill aimed to transfer funds from collected taxes directly into the PFD program enshrined in the constitution. He suggested that perhaps there would be some members in the community that did not receive the PFD or they would not get it for many years. He asked if it had been considered. Acting Commissioner Earls responded that she would have to look into whether there was economic research done on the impact to people leaving the state. She was not sure it was completed. She deferred to Mr. Stickel. 10:39:11 AM Mr. Stickel replied that broadly speaking, DOR had modeled impacts of the PFD, taxes, and spending. He stated that the sustainable fiscal plan would provide a stable source of revenue for a variety of government spending to include PFDs to Alaskans and providing government services such as the capital budget and education. The governor had been clear that providing a PFD was a priority and it was a core part of his proposed fiscal plan. Representative Bynum replied that under the proposed plan, there was no way any capital investment would occur. He noted that the state was not making capital investment currently and was not maintaining operational expenses. He remarked that nothing in the plan was actually causing that to happen, but it would put more burden on communities to pay taxes. He highlighted that on one hand the proposal sought stability by imposing a sales tax because oil revenues were volatile, but the other part of the plan sought to return to the volatility in seven years. He understood there were projections for additional [oil] resources coming online in the future; however, the 10-year projections did not show that additional revenue would be created, they showed that a permanent liability would be created with no investment in capital. 10:41:25 AM Representative Galvin asked about the implementation of the sales tax. She shared that she had done some research into how important broad based revenue would be to Alaska given diminishing revenue. She found it was pretty simple from an income tax point of view because it was possible to take a line from the federal income tax as opposed to the sales tax that put work on all of the local businesses. She did not see any slides on implementation and the cost to stand up the tax and then take it away in the future. She felt it seemed cost burdensome. She suggested that individuals could opt to pay an income tax when they applied for the PFD. She thought the current sales tax proposal put the burden on businesses. She asked how much it would cost to implement the sales tax and then shut it down. Mr. Spanos answered that the costs were included in the fiscal note. He did not believe there would be an opportunity to review the fiscal note in the current meeting, but he offered to address it at a subsequent meeting. He stated that an income tax was not simple. He detailed that about 10 years back the House passed an income tax that did not pass the Senate. He shared that DOR had done a lot of work on the bill internally. He explained that it was a complicated mechanism that required as many or more employees than were called for under the current legislation. The current sales tax proposal would require 67 employees, and he believed it had been 72 for income tax. The 67 employees would cost about $10 million per year (including travel cost for conducting audits). 10:44:59 AM Representative Galvin asked if the department had considered the cost to local businesses that may or may not have more paperwork. She understood that the state cost would be one piece. She asked about the multiplier effect of other components. Mr. Spanos answered that the cost of implementing a sales tax for a local business was miniscule, especially in a location that already had a sales tax at the local level. He stated that even in locations without a local sales tax, businesses' point of sale systems had the sales tax option built in. Representative Galvin remarked that Mr. Spanos had mentioned earlier that taxes like income taxes may be volatile because they are dependent on whether the economy was up or down. She noted there was some similar volatility with sales tax as well. She asked if the department was projecting some level of confidence that a sales tax was a better instrument. She thought it was also indicating there was a level of confidence that the oil fields and other areas would continue to bring some positive returns. She believed the model deescalated the corporate income tax and because other revenue (e.g., oil revenue) was expected to come in. She noted it factored in the projection that oil price would be predictable. She suggested that the plan should also factor in there would still be high revenue earning employees working on oil fields. She asked if that was the case. 10:48:03 AM Mr. Spanos agreed. Representative Galvin asked if DOR conducted any research on what percentage of wage revenue from oil and gas came from out of state workers. Mr. Spanos responded that DOR did conduct the modeling, but they were not prepared to talk about an income tax during the current meeting. Representative Galvin stated that when considering one tax versus another and how to best fill a hole [in state revenue] she believed the numbers would help the committee make decisions. She remarked that many Alaskans thought it was not right that nonresidents took the highest paying jobs in Alaska and did not contribute to Alaska. She understood they may spend money on things like fishing and camping gear in the state. She wanted to be mindful about what the bottom number looked like. She would appreciate including it in the conversation because there were many levers to pull and she wanted to ensure the right ones were being pulled that were appropriate for the revenue needed currently and in the long term. 10:49:34 AM Representative Jimmie thanked the Akutan and T'aaku Kwáan tribe for allowing state business to be conducted on their land. She shared that she did not grow up knowing about taxes. She relayed that taxes on goods such as groceries and building materials in rural Alaska included freight cost. She explained that businesses had to make money so they added two to five times onto the cost for the goods. She stated that rural areas paid year round tax with seasonal income. She detailed that sometimes corporations went into rural areas to help provide jobs to residents who may work around six weeks of the year without any other income the rest of the year. She stated it was now harder for people to get assistance and individuals were found to exceed the income level but they were struggling to make a paycheck and to pay for fuel and food. She explained that when they sought assistance they were denied, which put another burden on the family. She stated her understanding that under the tax proposal, residents would be paying more and receiving less in her village communities. Representative Jimmie highlighted that Typhoon Halong had damaged many homes in her district. She relayed that there was no insurance out in the bush. She elaborated that the Federal Emergency Management Agency (FEMA) helped support people in the immediate moment, but it was designed to help repair homes, not rebuild homes. She detailed that it was to help repair homes that families had been living in for generations. She stated that some of the homes were built and passed down from parents, which meant a lot. She highlighted that many people had to pay out of pocket for building supplies to repair homes, subsistence gear, snow machines, four wheelers, and boats that served as lifelines helping residents with subsistence. She relayed that goods all came in by plane or barge. She stated that the tax would apply to freight and the items would cost two to four times more than in urban areas. She asked how a statewide sales tax was meant to be equal when rural Alaskans faced much higher costs for basic necessities especially after a disaster. 10:53:39 AM Acting Commissioner Earls had heard the concern from others. She stated that the tax would spread across the state. She recognized that rural Alaska had high costs and stated that a lot of Alaska had high costs. She did not know how to provide an answer related to every individual Alaskan. Mr. Spanos added that rural Alaska was more expensive than urban Alaska. He stated that there was no perfect tax regime and it was difficult to build equity into a flat tax like a sales tax. There was an exemption for construction and the sales tax would not apply to building and rebuilding homes. He noted that discussion could be had about other exemptions. The current structure was a broad base to allow for a low rate for Alaska and the low rate benefit rural Alaska. He reiterated that there was no perfect tax regime. He added that they wished they were not present talking about a tax, but it was the situation. Representative Jimmie highlighted the scenario where a family lost all of their clothing and everything from memories to items purchased. She noted that it was expensive to ship items out [to rural communities]. She referenced a constituent who lost her home, who had no job and no other way to pay for any of her bills and was selling her own dry fish while her home was being repaired just to make ends meet. She asked for verification that the department was telling her that on top of local taxes - which should be paid to help benefit the local community - the individual would have to help pay a tax that would benefit urban Alaska but not rural Alaska. Mr. Spanos replied that it was a conversation and it would be on the legislature to pass the tax. He confirmed that if the tax passed, DOR as the tax administrator, would be responsible for telling residents they had to pay the tax. He stated that until the tax became law, it was a solution proposed by the governor. Representative Jimmie responded that if the tax passed she hoped the administration would help her write what she would need to tell constituents at home. She stated it was not okay for her constituents who were barely surviving to have to pay for a state sales tax. Co-Chair Foster shared Representative Jimmie's concern. He stated that while it sounded like a sales tax was equal (e.g., everyone paid 4 percent), for a gallon of milk that cost $10 in rural Alaska as opposed to $5 in other parts of the state, 4 percent of $10 was more than 4 percent of $5. He appreciated Representative Jimmie's concern. 10:57:38 AM Co-Chair Foster noted the committee would hear from AML at the 1:30 meeting. Representative Allard followed up on the comments by Representative Jimmie. She shared that some Eagle River residents lost their houses in the 2018 earthquake and still had to pay property tax. She stated that her district was impacted. She believed most rural communities did not pay property tax. She stated there were people in her district who paid between $10,000 and $15,000 in property tax. She remarked that she would forego property taxes in a heartbeat and pick up sales taxes. Co-Chair Foster relayed that hearing the remainder of the bill sections would be determined later. Representative Jimmie directed a question to Representative Allard and asked if property taxes were local taxes, not statewide taxes. Representative Allard replied that the property taxes came from the Municipality of Anchorage. Representative Bynum wanted to ensure the committee would have enough time to return to the point in the presentation where it left off and review the proposal in depth. Co-Chair Foster agreed there was a lot in terms of the questions and analysis. He stated it would not be the last conversation and the intent was to try to get the high level components of the bill out there. The committee would hear public testimony on the sales tax portion that evening. He remarked that the committee could come back to public testimony on the other bill sections at a later time because the committee had not yet discussed those sections. 11:01:06 AM Representative Bynum asked if there would be a presentation by AML in the afternoon. Co-Chair Foster replied that Alaska Seafood Marketing Institute (ASMI) and Alaska Travel Industry Association (ATIA) would also present during the meeting. Representative Tomaszewski thanked the department for being present with a difficult task presenting a fiscal plan. He shared that during his time as a legislator over the past three years, the constant drumbeat was about what the state was doing for a fiscal plan and how the budget would balance. He thanked the governor for bringing the difficult subject before the committee. He recognized it took strong leadership in the department. He stated it would be a difficult conversation and he looked forward to digging into all of the aspects of the proposal. 11:02:31 AM Representative Galvin referenced her earlier questions about out of state wages that the state did not have recent data for. She provided data from 2024 and detailed that there were 413,867 people working in Alaska and 22.9 percent were nonresidents. She elaborated that nonresidents earned ~$3.8 billion or 17.3 percent of total wages. She noted that the numbers did not include newer projects such as Willow and Pikka or a possible gasline that would require 10,000 workers including 5,000 from out of state. She relayed that those positions were estimated at an approximate annual wage of $175,000. She wanted to ensure all of the information was on the table to discuss. She relayed that the information came out on Monday and did not include federal employees. She wanted to think about all of the choices and what would impact residents, especially rural Alaskans, less. Co-Chair Foster asked the department for any closing comments. Acting Commissioner Earls thanked the committee. She stated it was a difficult conversation and she was grateful for the discussion. HB 284 was HEARD and HELD in committee for further consideration. Co-Chair Foster thanked the department. He reviewed the schedule for the afternoon.