House State Affairs, 4/28/26, 3:15pm

I'd like to call this meeting of the House State Affairs Committee to order. The time is 3:18 on Tuesday, April 28th, 2026, and we're here in Room 120. Members present today are Representative St. Clair, Representative McCabe, Representative Vance, Representative Holland, Representative Himschute, and myself, Chair Carrick. Let the record reflect we have a quorum to conduct business. Our record secretary is Andy Magnuson, and our moderator from the Juneau LIO is Renzo Moises.

Our committee aide today is my staff, Stuart Relay. And thank you all for helping. On today's agenda, we have 3 items. We first have a presentation from the National Conference of State Legislatures on data centers. And, um, it's my intention we'll spend up to an hour total on the presentation.

And then after that, uh, After that, we have a first hearing on the companion bill to a bill we have heard before, which is SB 237 by the Senate State Affairs Committee related to Social Security data sharing. And then, um, as time allows today, it's my intention that we'll bring House Bill 377 from this committee on public records back before us for some general discussion. With the committee members. So I'd like to also recognize that Vice Chair Story has joined us at 3:19, and our first item is the presentation on the economic impacts of data centers from NCSL. And this is generated from, uh, discussion relating to our broadband hearing back in March.

And similarly, we asked our, uh, folks at NCSL to take a holistic look at how other states are navigating policies and development around data centers. And we're joined today by two staff members: Alex McWard with NCSL's Environment, Energy, and Transportation program, and Nick Miller, who's NCSL's Fiscal Affairs program manager. So welcome to both of our presenters. And just for your awareness, um, after you put yourselves on the record and begin the presentation. If you just say next slide, we'll advance those here in the room.

Our committee, it's got that covered, so you don't have to worry about us getting those slides advanced. Thank you and welcome to our guests.

Good afternoon. Thank you very much. This is Nicholas Miller, Fiscal Affairs Policy Associate with the National Conference of State Legislatures. And Madam Chair, Madam Vice Chair, members of the committee, thank you very much for for the opportunity to speak today on data centers. I will kick us off with the discussion of their economic impacts, and my colleague Alex McWard from NCSL's energy program will speak to some of the energy considerations of data centers.

NCSL is a national, nonpartisan, and bipartisan organization that represents all 50 state legislatures, including more than 7,500 legislators and 35,000 legislative staff. And we're grateful to be with you all today. On the next slide, please. I'll speak today about some of the emerging topics of data centers, which are certainly a very fast-moving fiscal and economic topic across the country. I'll speak briefly to the data center tax incentives, which has seen some of the most legislative action so far this year, before touching on Emerging revenue opportunities, new taxes on data centers, and then a conversation around, um, data centers and their possible impact on property values.

Before concluding with another very new but equally, I think, fast-moving and significant topic for data centers, and those are state efforts to ban data center development. And so, next slide. To kick us off with the discussion of the incentives— one more slide, please— we'll see that 38 states currently offer some sort of dedicated tax incentive to data centers. They're all on the map there and on the next slide, um, some of the details for those tax incentives. In all 38 states that offer a dedicated tax incentive for data centers, that includes at least an exemption from the sales tax, which is the sort of most common incentive.

And so I'll note that while Alaska is not on the list of states that have this dedicated data center tax incentive in statute, um, Because Alaska is among the states that doesn't levy a statewide sales tax, we have heard that that sort of works as a tax incentive in other states. So there is no sort of dedicated part of the code, but I do want to acknowledge that because Alaska does not have a state sales tax, you all could sort of fall into that category. 14 States extend that specific sales tax exemption to cover electricity. And 11 states offer partial property tax abatements to data centers. And on the next slide, um, one question we often hear is the why.

Why are states competing to attract data centers? And there are a few different reasons. Employment is one. Data centers do create some jobs, up to 1,500 in the construction of a large data center. And some of those can be sort of skilled and technical construction jobs like electricians and pipefitters, um, but then once the data centers are operational, they tend to have far fewer full-time positions, often on the order of 10 or 20.

And there's also the capital component. Data centers are very costly, especially in terms of capital. They're often thought of as a capital expenditure, and that's part of the reason why sales tax exemptions or not having a sales tax is so important to the data centers themselves. One data center can be over $1 billion, and that capital can benefit local firms and local communities. And then, less discussed, but something I'll touch on much more in the revenue section today, and that is property taxes.

Data centers can make substantial local property tax contributions. And there are considerations as well. Some states are paring back their incentives, often due to concerns over energy use or other environmental considerations like water or land use. Which my colleague can speak to much more. And on the next slide, uh, we have a look at some of the big state actions so far in 2026.

So of the 38 states that offer data center tax incentives, 9 of those have considered bills to completely repeal those incentives, and 4 additional states have considered bills to create brand new incentives. And on the bubbles on the map there, I've pulled out the 3 bills that advanced out of committee that saw a lot of movement. And in Connecticut and Georgia, those bills are sort of stalled or failed, but ultimately they would significantly restrict the data center tax incentives. And in Washington, um, just a few weeks ago, the governor actually signed the bill into law that will make refurbished data centers no longer eligible for the tax incentive. So essentially, um, only brand new data centers starting up can claim that favorable tax treatment.

Existing data centers that are sort of refurbishing or expanding will no longer be eligible for a tax incentive. And that was, I would say, the first big state to enact this data center tax incentive rollback so far in 2026. And on the next slide, I— we have a few more details. I think the key thing is that of the states that are repealing their data center tax incentives, ultimately what's happening is sort of repeal light or an off-ramp. So oftentimes states have considered completely scrapping their data center tax incentive, but as the legislature sort of works through it, uh, it becomes more like what we saw in Washington where they're significantly narrowing the scope rather than completely scrapping the data center tax incentive.

And I'll add that of the 4 states that have considered brand new incentives, none of those has advanced and several were defeated at the committee level. So I think at the start of the year, it wasn't really clear which way states would go on incentives, but we have certainly seen more interest in repealing or rolling back data center tax incentives than we have in creating brand new data center tax incentives. And on the next slide, I'll just speak to this briefly. It's another question we frequently receive. How much do these incentives cost?

In Virginia, which is data center alley, where there are several hundred data centers, they're looking at nearly $2 billion next year and this year each, over $1.6 billion this year alone. And I think the key thing is that the cost of data center incentives has increased much more rapidly than was initially forecast, and that data centers themselves overwhelmingly use these incentives. The data centers sort of know the tax code well, and they are definitely keenly aware of the lay of the land for tax incentives. And so on the next slide, um, part of the reason I introduced this topic is because we often hear data center tax incentives used as a sort of carrot almost, um, rather than a sort of stick of telling data centers what to do. Um, states can attach conditions to the incentive, and that can influence data center behavior.

So on the next slide, 26 states have considered attaching new conditions to their data center tax incentives. Idaho actually unanimously advanced a pretty comprehensive bill that is being worked out in a conference committee right now. And on the next slide, I have pulled out a few of those bills. Oftentimes they target energy requirements. And again, my, my colleague Alex can speak to this much more than I, but in Kentucky, for example, the State House advanced a bill that has new requirements for utility cost shifting, essentially requiring data centers to pay their own way with electricity.

And the— that requirement is attached to the incentive. So in order for data centers in Kentucky to receive these tax incentives, they must meet certain energy requirements. And in Wisconsin, a bill would require data centers receive a green certification like LEED to receive the tax incentive. So, it's an interest of lawmakers of using these tax incentives to attach certain conditions to data centers. And so, on the next slide— And actually, if we could pause at that slide really quick, we have a question from Representative McCabe.

Thank you. And so, I'm curious, you know, with Alaska and our energy needs, you know, we hear, we talk, you're talking a little bit about energy and all that stuff, and you may get into this later, I'm not sure, but What about incentives for a data center that's going to build its own power plant and then sell power to the grid afterwards? Would there be any states that would mirror that? I mean, that's Alaska's plan. The power company is going to come first.

The coal plant will absolutely have to come first because our grid couldn't support a 400-meg draw from a large data center. So we would have to build a new power plant. And the plan currently, or one of the plans, is to build that power plant, 1.25 gig power plant, use 400 megs for the data center as an anchor tenant, if you will, or an anchor user to stabilize the rates to the ratepayers, and then sell the rest of the 60-ish megs that are left after carbon sequestration to to the grid. What— are there any states that kind of mirror that? I know the data centers are struggling right now to find power plants as well.

I think there's a 3-year lead time on a turbine power plant. So interested in exploring all that. You're focused a little bit on the tax incentives. I'm wondering about the mechanics of the infrastructure, really. Yeah, this is Alex McWard.

The energy program. So, I'll kind of go into this a little bit with my end of the presentation. But yes, we are seeing states looking to kind of enact legislation that would promote these data centers bringing their own generation. An example of that is a bill that was introduced relatively recently in Pennsylvania that would basically require hyperscale data centers to bring their own power supply and pay for their own infrastructure, like transmission infrastructure. And then they would allow any excess power generated by that power supply they bring on to be sold back to the grid.

Um, and but I'll discuss this a bit more later on in the presentation. Okay, thanks. And we also have a question from Representative Himschute. Thank you. Uh, through the chair, I just want to— I think it's on the.

Slide we're on under energy requirements where you talk about large load data centers. So that would be an AI data center versus a, like, a typical data center, or can you clarify what large load means? Yeah, so—. Okay, go ahead. I'll discuss this also a bit more in my presentation, but large load, the definition can vary by state, but for the most part, it's about the energy demand of the data center, the peak energy demand.

So for some states, that is a data center that has 20 megawatt peak energy demand. For others, it's 100 megawatts. So it does vary a little bit. Okay, thank you. And then we also have a question, Representative Holland.

Great, thank you. Through the chair, while we're on the incentives, I just had two clarifications related to the incentives. The first is, are the incentives really being driven by the the business model necessity of the incentives, or is this a matter of one state trying to get a data center away from another state, and this is kind of a zero-sum game of, of just trying to be the most attractive place for the next data center? And with that, the other side of that coin is, as we looked at some of your examples of where they're repealing that, is that because the community is seeing they're getting too much activity, or there's too much adverse impact, or are they figuring out that they don't need to give the incentives for for the projects to proceed anyway. So I'm wondering if you can just kind of clarify a little bit about the dynamics of the incentives and the repeals.

Madam Chair, Representative, thank you for that question. To the, to the first part of that, the data center business model, I think it's more the latter. I think it's more states are trying to get a leg up and compete to attract data centers more than it is incentives are strictly necessary for data centers. Um, we have heard that data centers certainly pay attention a lot to the incentive, and it's— they have been almost described as a prerequisite to attract data centers. And the caveat I'll add to that is, um, there is a tremendous amount of capital expenditure being committed very quickly to data centers.

I just saw a statistic that it's more than, um, the Manhattan Project and the Marshall Plan and the Apollo program combined and adjusted for inflation. So it's a tremendous amount of money. And there's a question of if the macroeconomic condition, you know, if interest rates or something changed significantly, then the data centers themselves might actually be more reliant on other forms of support like tax incentives. But I think right now it is more states competing for a leg up. And to the second part of your question, Um, I'll speak more to, I think, local concerns around data centers, um, when we touch on data center bans and data center moratoriums.

But I, I think these pushes for repeal are driven more by local concern and local interest about things like the cost of energy. In states like Arizona and Idaho that I mentioned, availability of water oftentimes enters the question. In Virginia and Pennsylvania, there's more of a concern about land values or a backlog of interconnection to the power grid as well. So I do— I think it's local concerns are oftentimes driving the conversation around repeal and around moratoriums as well. All right, thank you.

Thank you. Um, thank you all for those questions too. We're going to go ahead and continue. Um, and just as a reminder, Mr. Miller, Mr. McWard, if you could just re-identify yourself whenever switch speakers just so that the record is, is clear there. Thank you.

Thank you, Madam Chair. This is Nicholas Miller from NCSL. And so on the next slide, I'll just turn to new revenue opportunities, the new taxes that states are considering. And so on the next slide, we see 6 states where there have been bills introduced that specifically target data centers as a new source of revenue. And part of this comes from the fact that nationwide the picture of state revenue is just sort of flatter.

States are not— are in general no longer flush with the cash that they had from federal aid after the pandemic. I know that Alaska's revenue picture is rather unique, but that's sort of the 50-state story. And on the next slide, I'll delve into some of these revenue bills I think the state bills that target data centers for revenue can be placed into sort of 3 buckets: property tax, sales tax, and then brand new or sort of bespoke data center taxes. And I'll focus specifically on Pennsylvania. I put a little campfire on the slide because in Pennsylvania there is a bill, uh, that was just introduced but that would sort of capture property tax revenue just from data centers, and then use that captured property tax revenue to expand the homestead exemption specifically for the property taxes levied by school districts.

And data centers pay significant amounts of property taxes because of how expensive they are. In Loudoun County, Virginia, which again is Data Center Alley, the data centers fund the entire general operations budget for the county and almost half of the entire tax base of Loudoun County is just data centers. And that's sort of a unique case, but increasingly the amount that data centers are contributing to property taxes, I think, is being seen as a significant source of revenue. And we have heard interest from other states in looking at bills, like in Pennsylvania, of specifically capturing the tax increment from data centers and using that to pursue broader property tax relief. And there are a few other strategies for the sales tax in Indiana.

A bill advanced but was not ultimately adopted that would require data centers repay part of the sales tax that they have been forgiven as payments in lieu of taxes directly to municipalities. And then in Virginia, they are considering a sort of bespoke or brand new tax that would levy a per square foot tax on data centers. And on the next Next slide. That's just sort of the short version. But those sort of new taxes for data centers are certainly an option as well.

And Mr. Miller, we're gonna pause here. I have a question from Representative McCabe. So thanks, you kind of went really quick over that, Mr. Miller, but you said, I happen to be a bit familiar with Loudoun County. I know there's 100+ data centers in Loudoun County and that the property tax relief to the homeowner has been around $3,000 per homeowner. And you said broader property tax relief, and I think that's what you meant.

Is that correct? Madam Chair, Representative, thank you. Yes, sir, I am in Loudoun County specifically. That's exactly right. The broader property tax relief there is lowering the mill rate across the board.

So they have pretty significantly cut property tax rates in Loudoun County, and the county has directly attributed that to data centers. What Pennsylvania is considering is a little more targeted, but that would be an expansion of the homestead exemption rather than lowering the mill rate. But functionally, it's, it's sort of the same. It would mean across-the-board savings on property tax bills. Thank you.

Okay, I see no further questions at this time, so please continue. Thank you, Madam Chair, and I will move on to the next slide and data centers and their effect on property values. And I appreciate the opportunity to to speak to this a little bit, because it is, it's a new topic, and it's one on which there's not yet consensus, but is certainly— there was a question earlier about the sort of local concerns. Property values often enter the equation when localities and when counties are considering whether or not to permit new data centers. And so on the next slide, I've pulled out a finding that might seem a little surprising, but they're really the only study to explore this in depth, comes from Virginia in 2023.

And the researchers there found that homes that are nearby data centers actually sell for more than homes that are farther away. It's possible that data centers are actually increasing property values. And there are a lot of caveats with that. One is that data centers cluster near infrastructure. They rely on a robust power grid, on road access on things that would likely increase property values anyway.

So we don't know if this is a causal relationship. We don't know what the property values would be if the data centers weren't there. It's possible those places near data centers would be worth even more. And it's also possible that this relationship has changed since 2023. Data centers have more recently become a hot topic, so it's possible that this relationship no longer holds since the study was conducted.

And on the next slide, there is one more study that looked at this, and I will not read this because it's a lot of text, but on the next slide I have pulled out a few key quotes. This is a study from.

Virginia's Legislative Audit Committee in 2024. This is, um, one of the nation's most robust looks at data centers. And again, it's from Virginia where there's a very significant data center industry. And what the legislative auditors found, uh, they said it is certainly possible that data centers have affected resale value, but there is not yet evidence. And again, this was in 2024, so it's possible but we don't know.

And one explanation they heard was was that the housing market in Virginia is so tight that buyers just don't care. And so that speaks to the fact that maybe there are other factors in the housing market that are more important than proximity to data centers. But again, this was from almost 2 years ago now. So it is possible that the situation has changed. And if we could pause here, we have a question from Representative Holland.

Great. Thank you. Through the chair, I'm curious about this issue of proximity to a large data center, is, in my mind, I don't think of it as being that much different than a large manufacturing plant. And throughout, you know, the Southeast, you might see very large automotive plants, furniture manufacturing plants, or in some cases you've got large regional warehouses that get put up near interstates for logistics, or could be large retail box stores. Is there something about data centers as a large— I think of it as a large box that gets placed.

Is there something that residents and neighbors see as unique about data centers that makes this issue different than any other large concentrated big development? That this is a different manifestation that we're dealing with, or is this just the latest new big thing that's being built? And if we had new automotive plants going in, we'd have the same issue, it'd just be a different target.

Madam Chair, Representative, thank you. Um, there are a few things unique to data centers. One concern we've heard often is noise. Data centers have large cooling systems, and there is a concern that those can emit a continuous noise. Um, that was measured in the Virginia study.

They found there is a noise. It's less than an interstate highway, for example, but there are people who wouldn't want to live next to a highway. So it— I think the noise is unique. There are some other possible concerns. Data centers have backup generators.

I think there's some thought that maybe the backup generators are— could produce pollution or something to that effect. But I do think, Representative, you touched on a key facet of data centers, which is that essentially they are large warehouses filled with a lot of computers. So just as there are people who would be concerned about living next to a Walmart, or living next to an automotive plant. I think the concerns with data centers do fall into the same camp. Follow-up?

Great, thank you. Just a brief comment as a follow-up. You know, when I think about these other large boxes, they have tremendous impacts in terms of traffic. If you imagine a large box store or manufacturing plant and all the traffic and the additional build-out of the road, whereas a data center, you put it up, and as you noted earlier in this presentation, takes a bunch of people to build, but once it's built, you don't have that large flow of traffic. Traffic.

So I'm just kind of curious why this isn't seen as relative to a manufacturing plant, a warehouse, or a large retail store, why this maybe isn't slightly better than some of the other uses that might have the same footprint. So I appreciate the information you're sharing with us today on this issue and continue to learn about it. Thank you. That's a, I think, a great question too. Um, I don't see any additional questions right now, so please continue.

Madam Chair, thank you. And on this slide of legislative action on property values, this is, um, you know, we've touched on the property value pieces. It's still being explored, and legislatures are just beginning to explore the topic as well. So there are two bills, one in Illinois and one in Kansas, that would tackle a potential negative property effect from data centers head-on. And essentially, the bills would require compensation for landowners and property owners who are adjacent to data centers if they can show that the data centers caused their property values to go down.

So it is, it's, it's an interesting concept. Um, the main difference between the bills is that in Illinois, the data centers would be required to compensate the landowners, while in Kansas, the government agencies that permitted the data centers would be required to offer that compensation. So in a way, it's a sort of insurance that if a data center comes and your property values plummet, you would have some avenue to seek compensation for that. And those bills have not advanced, but as far as I know, it is a sort of novel mechanism, and it does speak to the fact that property values remain top of mind in legislatures and for homeowners as well.

And on the next slide, I'll— move to my final piece today before turning things over to my colleague Alex, and that is data center moratoriums, or statewide efforts to place bans on data centers. And so on the next slide, we have seen legislation in 13 states that would place a statewide ban on data center development. Maine advanced their moratorium this month, and just last week it was vetoed by the governor. So that is the only state where it has passed the legislature but did not quite make it into law. And then moratoriums in Wisconsin and New Hampshire were both defeated in the legislature.

And on the next slide, I will not go through each of these bills, but I wanted to make sure that the committee had access to the bill numbers and to some of the details. Um, the key thing is that with the exception of Wisconsin, where the data center moratorium was defeated already, um, all of these moratoriums would apply to new data centers. So existing data centers would be grandfathered in, but brand new data centers would be prohibited from starting up or being constructed. And on the next slide, I have pulled out, um, three of the key details from these moratoriums The first is that they are temporary. They're generally 1 to 4 years, and it speaks to an effort from states to essentially press pause.

No state considered a sort of permanent indefinite ban, but the states are interested in pressing pause, and oftentimes these data center moratoriums are paired with studies, with impact studies on the utility rate, on water value, on the cost of the incentives, Again, it's states looking to pump the brakes and to study data centers more closely.

To a question earlier and that Alex spoke on, oftentimes these bills are defining data centers in terms of their energy demand. 20 Megawatts was the threshold in statute in Maine from the bill that ultimately was vetoed. I mentioned that data centers are essentially big buildings filled with computers. Um, what that looks like in statute, the statutory definition of a data center increasingly hinges on an energy threshold of 10 megawatts or 20 megawatts or 100 megawatts. And I'll say that that is often how data centers speak of themselves.

Um, data center operators and constructors sort of think in terms of the megawatts of the power demand. And we've heard from industry that time to connect to the power grid is one of, or if not the most important factor when deciding where to site a datacenter. On my final slide here of content, on the next slide, I'll just speak why these bans are being considered. It's a lot of the same reasons that states are considering repealing their datacenter incentives. Energy demands, actually in Maryland and Virginia, the data center moratoriums were contingent on the availability of electricity.

The data centers could not start operation until the grid operators could certify, um, that they could meet those data center power demands. And there's also the water component, again, especially in western states like, um, Arizona or Utah, um, water tends to enter the conversation more. And there are local concerns as well, um, and I, I appreciate the questions to this, I've already mentioned some of them about noise, or land values. And again, this is not to say there are no benefits to data centers. They do create both permanent and temporary jobs, and they can also have substantial benefits to local economies and to local tax revenues.

So it's— there's an interest nationwide in weighing the costs against the benefits of data centers. And on the final slide, Mr. Miller, if we could actually Pause here. I have a question from Representative McCabe. Thanks.

Yeah, so you— Mr. Miller, we're talking through the chair, we're talking about water use here. And one of the reasons that— in fact, if you get online and Google data centers, you'll see all sorts of horror stories about millions of gallons a year use of water. I don't know, maybe the next— your associate's going to flesh that out a little bit. But in Alaska, one of the reasons to locate data centers in Alaska is because they wouldn't be— have to use that evaporative cooling.

Cooling, which uses a lot of water. In fact, even in the lower 48, even in the western states, the water use of data centers is a fraction of what is used for agriculture and other things. So I'm curious what you're seeing as far as restrictions in other states, in the hotter states like Arizona and Texas. I think you mentioned both of those. Data center, places where data centers were being used or built.

Yeah, this is Alex McQuarrie. I can speak on that a little bit more. Water is a little more outside my scope, but in terms— I'm more focused on energy. But I will say we are seeing states approach the water consumption, so seeing some transparency and reporting requirements with water, so introducing legislation that would require data center operators to report on the amount of water they're consuming annually, where that water is being drawn from, also just placing restrictions on specific sources for water. So, I know Illinois introduced a bill this year that would prohibit data centers from withdrawing groundwater from the MoMa— Mohammet Aquifer.

So, we are seeing kind of those more tailored, specific cases of restricting water usage. And I do— our colleagues on the environment team track this water issue more closely, so I'd be happy to share some examples with you that they put together. Follow-up? Yeah, that would be great because the water use is something that we're seeing a lot of online. There seems to be a shift in the online algorithms and search engine optimizing that is almost deliberate to force this discussion about water, which is fine.

Fine, except in Alaska we're going to use a closed-loop system and the heat blow-off across the radiators is going to be used to heat greenhouses. So it's kind of an elegant solution. We won't use— I think probably the only water many of them might use is just the water enough to flush the toilet, especially on the North Slope and places, even Port McKenzie. So I'm wondering, if anything that you can share on that, that NCSL has on, on that, would be great. Because we're trying to, um, get to an honest narrative here, to get to a really honest discussion about water use, about electrical use, and about noise— the three things that people are concerned about.

So anything you can share, um, that is, uh, true and transparent and honest and not part of, you know, the black helicopter conspiracy theories would be fabulous. Of course.

Sorry. Okay, well, I haven't seen the black helicopter conspiracy theories, but you should share them with the group. Representative Himschute. Thank you. I just— I'm on the fringe of beginning to understand all of this, and I just need to understand latency.

If we build data centers in Alaska, are they useful? Because, I mean, it's still going to take time to move the data over our geography, and I just want a clear answer on that. Is that something you guys can help me with? Madam Chair, Representative, thank you. Nicholas Miller from NCSL again.

I'm happy to include additional resources on that and follow up. And to the latency points, my understanding is that it depends on what the data center is being used for. So data centers that are used, AI has caused an explosion in demand for data centers. The data centers that are being used to train artificial intelligence models, latency is not really an issue. Because it's training a model that sort of doesn't exist yet.

So the data center is essentially doing its own thing. And that's why Idaho is an emerging market for data centers as well. There is some, certainly some latency there, but because the data centers are being used sort of in a closed ecosystem, latency is not such an issue. For data centers that are used for artificial intelligence operations, that is where the latency is more important. And there are other sort of existing data centers that are used for financial transactions.

For example, if you use your credit card to check whether or not the transaction is authorized, for those transaction, for those type of data centers, latency is extremely important because it's all about time. So the short answer is that it depends on the type of data centers, but especially for artificial intelligence data centers, there are certainly some instances where latency is much less of a concern. Quick follow-up. Follow-up. Thank you for that.

I kind of suspected, like, if you're— like, I recall hearing that if you're trading, you actually have an advantage in making your trades. People are actually installing cables to make their trades directly between whatever. So if you're, like, trading on the markets, how you communicate those trades matters more than a kid doing homework and trying to use AI for homework or whatever. Absolutely. In terms of time.

So this is another, let's call it naive question. Is there an end to how many data centers will be needed? Is there a point at which the models have learned what they need to know? And because right now it just feels like it's exponential growth with no end in sight. We're gonna, need an unending number of these?

Is there a point at which it slows down in terms of what's needed, or is this just going to be continuous growth until these things cover the entire surface of the earth? Again, a naive question. Madam Chair, Representative, thank you. And, um, these are all outstanding questions that speak to many of the things we've heard again and again, so, so certainly not naive. And, um, That is actually one of the key questions we've heard from data center investors and operators about what's going to happen with all of these brand new data centers.

It's, it's a tough question to answer. Data centers are not sort of new. I mean, they've been around really in earnest since the dot-com boom, and they've sort of steadily gained steam. So certainly data centers themselves are not going to go away. With Artificial intelligence in particular, one question we've heard is whether or not AI is sort of a winner-take-all game.

So, and that's a bit outside of my expertise, but right now there are several different sort of AI models training and competing with each other, like Google Gemini and ChatGPT and Anthropic's Claude. If one of those ends out, turns out to be absolutely perfect, then maybe, you know, the market will change dramatically. But that, that is very speculative, and it is clear that demand for data centers is certainly still picking up. But if there are significant market changes in the demand for AI or significant macroeconomic changes, then it is possible we could see that change. Okay, thank you.

Thank you for that, and I don't see any additional questions, so feel free to continue. Madam Chair, thank you. And I should say this is Nicholas Muller again from NCSL, and I just have one last slide. Certainly I welcome any additional questions. Thank you again, Madam Chair, Madam Vice Chair, for the opportunity to present today.

NCSL earlier this month published a report on data centers, Subsidizing Servers: How States Are Competing to Attract Data Centers, and it explores the 50-state landscape of state economic and tax policy towards data centers, and it touches on some additional tax considerations for data centers about corporate income tax and, and things like that. And that is our most comprehensive online resource to date on data centers, and certainly I welcome any additional questions before turning things over to my colleague Alex.

I don't see any additional questions. Mr. McWard, did you have any additional comments?

No, we can move to the next slide. This is Alex McQuarrie. We can move to the next slide and I'll discuss data centers a bit more with regards to their energy usage.

So my name is Alex McQuarrie. As I said, I'm a senior policy specialist with the energy program at the National Conference of State Legislators. I appreciate the invitation to come speak here today to the House State Affairs Committee. We can move to the next slide. So, I'll start off with just some background information about data centers and their energy usage.

Data centers, as we kind of discussed, are not a new concept. They've been around for a while, but with the increased use of new technologies like AI, as well as expanded cloud computing and cryptocurrency mining, a lot more data centers are necessary to support these functions. And one of the major concerns about increased data center development, of course, is the energy demand from data centers. And so data centers host numerous servers that are constantly running, and thus they require constant 24/7 supply of energy. Additionally, these servers produce a lot of heat, so significant cooling systems are required in most regions throughout the country to prevent the equipment from overheating, which of course adds on to the.

Energy demand. Data centers currently account for a little over 4% of energy consumption in the US, but forecasts suggest that this could more than double by the end of the decade. And I included this map here on the slide from the National Lab of the Rockies, which displays the locations of data centers around the country as well as electric transmission infrastructure. So as you can see on this map, there are clusters of data centers in certain areas such as Virginia in Texas, and there's a lot of reasons why data centers cluster here. Partly, as we discussed earlier, is due to incentives that states offer for data centers, but also a huge driver for data center operators is to locate where there is existing energy infrastructure to easily gain access to power.

And we can go to the next slide.

Uh, the energy consumption of data centers has really started to raise a lot of concerns about energy supply and increased costs for ratepayers. And we really started to see this emerge as a concern at the beginning of about 2024 as states started to introduce legislation related to the energy usage of data centers. And this trend has continued to expand since then. Last year in 2025, we tracked around 70 bills introduced by state legislators concerning the energy usage of data centers. And so far this year, we've tracked over 150 bills introduced.

So of course, this is a— issue that is continuing to progress. Examples of introduced legislation include setting reporting requirements for data centers and their water usage and energy usage, tax incentives for energy-efficient technology, as well as setting standards to ensure equitable utility rates. And I'll discuss each of these policy topics in more detail during the presentation. So, we can go to the next slide.

Perhaps the greatest trend we're seeing right now is how states are approaching the cost allocation and cost recovery of interconnecting data centers to the grid. The significant energy demands of data centers is raising a lot of concerns about how utility rates will be impacted. The expansion of data centers is going to increase energy demand overall and thus require new infrastructure investments for interconnection. So, this means new generation facilities, transmission, and distribution lines. For proposed data centers.

Traditionally, a lot of large infrastructure projects have their costs recovered through increased electricity rates. However, since some of these infrastructure projects would be constructed primarily to serve data centers are not directly benefiting residential ratepayers, policymakers are now looking to see how to prevent these costs from shifting towards these unrelated ratepayers. Uh, so we first started to see legislation emerge on this issue just last year in 2025. And states have taken a few different approaches to the issue. The most common type of action we are seeing is states establishing specific tariffs and customer classes for large loads like data centers.

Electricity tariffs are structured pricing plans that determine how consumers are charged for the electricity usage. So creating new customer classes for data centers and other large loads would allow specific pricing plans that are separate from other utility customers like residential ratepayers. So, an example of this was in Maryland last year where they enacted legislation that requires utilities to submit a specific rate schedule for large load customers. And the rate schedule must require large load customers to cover the just and reasonable costs associated with any electric transmission or distribution buildout required to interconnect or serve the large load customer. I do want to note that this legislation does not specify data centers but instead uses the term large loads, which it defines as commercial or industry customers that have an aggregate monthly demand of 100 megawatts, which of course would encompass a lot of these larger hyperscale data centers.

And so this kind of goes back to what we were saying earlier. A lot of the state examples we're seeing use the term large loads and state definitions of large loads can vary. Maryland's definition of being 100 megawatts or higher is definitely more on the higher side, and then like Nicholas mentioned, we see some as low as 20 megawatts. So similar to Maryland, we saw Minnesota and Oregon both pass legislation that would establish new customer classes for large loads. Then also last year, Utah enacted Senate Bill 132, which set clear rules for the interconnection process for large loads to the grid.

So this bill requires large loads to pay for any interconnection or transmission-related studies that are necessary, as well as any identified necessary interconnection upgrades such as transmission or distribution system upgrades. And then we continue to see this legislation progress into this year. So Idaho passed similar legislation to Utah, also requiring large loads to pay their full cost of service for any infrastructure investments necessary to provide power. So that includes generation along with transmission and distribution infrastructure. And I would just like to note that these examples are— these are just some key examples I've highlighted so far in 2026.

We've seen many other states introduce similar legislation aiming to protect ratepayers. We can go to the next slide.

Uh, so building off this, another trend we are seeing in states, uh, are demand-side management programs or other measures to address data centers' energy consumption. This year, Virginia enacted legislation requiring utilities to establish voluntary demand flexibility programs for what it calls high energy demand customers. So those are customers that have an energy demand of 25 megawatts or greater. And what these demand flexibility programs will actually look like is up to utilities and is dependent on approval from the state public utility commission. But demand flexibility programs can encompass a lot.

That could be things like demand response programs, which encourage customers to shift their energy usage through things such as time of use pricing. It can also include efforts such as energy efficiency and conservation. Methods to reduce consumption.

Then another bill I've listed here, one of the significant data center bills enacted last year was Senate Bill 6 in Texas, which set new interconnection rules for large loads. And one of the primary requirements of the bill is that loads of 75 megawatts or greater looking to connect to the grid must participate in a demand management program. And so this program mandates that large loads have shutoff equipment installed as a condition of the grid interconnection, and utilities may disconnect these eligible loads during firm load shed events. And so, load shed events are controlled power outages ordered by grid operators which electricity— when electricity demand exceeds supply.

Then, we also have states looking to incentivize the use of distributed energy resources to provide power directly to data centers. The greatest example of this perhaps was last year in West Virginia with House Bill 2014. West Virginia is an example of a state that's very much looking to promote their data center growth. And so, this bill created the High Impact Data Center program, but it also created a microgrid development program along with that to encourage the use of microgrids to provide energy directly to new data centers. And so, a microgrid is a group of interconnected distributed energy resources that can operate as a controllable entity, allowing it to disconnect from the grid and run in island mode.

In case there is a disruption to the greater grid. So, the bill requires a designated liaison to serve as a point of contact for certified microgrids and high-impact data centers in order to coordinate their development.

Then, similarly, in the frame of onsite generation, this year Kansas introduced legislation to establish a regulatory framework for what it calls private energy campuses. Private energy campuses are privately owned properties that can generate and provide electricity directly to large loads located within their boundaries. And so, electricity generated on these private campuses cannot be delivered outside of the property's physical boundaries. And this framework basically allows private energy campuses to be exempt from a lot of the traditional public utility regulatory oversight, therefore kind of facilitating the development of on-site energy generation for data centers by avoiding some of the regulatory restrictions. And then, Nicholas, of course, mentioned how a lot of states have tax incentives centered around data centers.

We've now started to see states make these tax incentives a bit more contingent on their energy performance. So Colorado and Virginia are both examples of states that introduced legislation requiring data centers to maintain certain energy efficiency standards in order to maintain the tax exemptions they receive for their equipment. Then we can go to the next slide. And actually, can we pause at that previous slide? And we're going to go to Representative Holland.

Great. Thank you. Through the chair, our Congressman Begich, in an article that was in the Anchorage Daily News in the last couple days entitled something about the AI gold opportunity, noted the federal legislation, the DATA Act of 2026. It's, I think, Senate Bill 3585, and I don't know the number of the House companion. I'm curious what you see happening in terms in terms of this federal legislation that is allowing the islanded or single-user utility development.

Complementary to the bills you just mentioned that were providing for or requiring behind-the-meter power generation, or is this action happening at the federal level that somehow is preempting some of the state's ability to proceed with this legislation that you're just discussing now? Thanks.

Uh, I can't speak, uh, too much on this topic. Our DC team, um, tracks federal legislation and has a much better understanding of how this legislation will affect whether or not it will preempt states. And so, to be honest, I think it would be best for me, uh, Representative Holland, to connect you with our DC team to ensure the best answer for you on that. Thank you. Thank you.

And I don't see any additional questions here, so please continue.

Excellent. So, um, then moving on, uh, final The next thing I want to mention is that we see states considering legislation that would require data centers to regularly submit reports on their energy and water consumption to the state. So while reports— reporting requirements vary by state, for the most part they include total energy and water consumption for the reporting period, as well as an assessment of the power usage effectiveness, and then also reports on data centers' energy sources and the energy efficiency and conservation measures that have been implemented. Uh, so we've seen quite a few examples of states introduce legislation with these reporting requirements. Uh, this year Nebraska became, uh, one of the first states to actually enact this kind of legislation requiring annual reports from data centers.

Uh, despite the decently large number of bills across states we've seen introduced, uh, that would, uh, create reporting requirements, uh, we actually have seen a decent amount of opposition to this kind of legislation. And I think a lot of this opposition comes due to concerns that I'll set too strict of oversight restrictions that could drive data centers to locate in states with less rigid requirements. So an example of this, in California, Governor Gavin Newsom cited similar reasons for his veto of a bill last year that would have required water consumption reporting. Then, as you can see listed here, in New Jersey, the governor vetoed a similar bill and explained the decision to require reporting on energy should be left up to the Board of Public Utilities, and that this bill would have made metrics publicly available, and the governor believed that the reporting metrics should remain confidential. So we can go to the next slide.

And we have a question as well on that last slide from Representative Holland. Great. Thank you, Chair Carey. I want to return back to a question I asked earlier, and perhaps same answer, but you The way you describe the situation is really intriguing because our country at this point is trying to restore its manufacturing capability. And some of the federal efforts have been directed around trying to increase the competitiveness of manufacturing.

And a data center in many ways is no different than a large manufacturing plant. Its energy uses, its water usage, its noise. Indeed, it's even got larger traffic impacts and community impacts. And I'm just trying to wrap my head around the efforts to try and control the data centers and what that means for any other efforts to grow our manufacturing capability and, and the rest of our economy. And is there a connection between what you're seeing here and other high-intensity value-added operations that's going on?

Or again, is there something about data centers that we're trying to make it hard while at the same time we, we want manufacturing and other activities that have a similar or even greater community impact?

Yeah, I think one of the things with data centers is it's exploded very suddenly, this issue regarding data centers, and I think that has caught a lot of people off guard. Like I mentioned, we really just started to see legislation emerge on this topic about 2 years ago. You know, I've been working on energy issues for the past 5 years or so, and At the beginning of that, no one was really— this was not a discussion. And so I think this has caught a lot of people off guard. And with the sudden rise of AI, there is just a lot of concern about how potentially out of control this data center development could get.

But I do see— I mean, I do see the relationship between, uh, manufacturing and data centers. And I think, you know, some of the public pushback to data centers would probably feel the same with manufacturing plant being placed within proximity to their home. And so I think the concerns you see around data centers are largely due to the sudden proliferation of this issue and basically just how quickly it's kind of developed and kind of the concerns about how much it will expand in the future. Thank you. And, uh, thank you, Mr. Miller and Mr. McBoard, very much for your presentation.

I just wanted to jump in the queue, and I know we talked a little bit about job creation. There's a lot of jobs during the construction of a data center and very few once it's completed, but what is the general nature of the 10 to 20 jobs an average data center has? Is it something that anybody can do? Is it something that requires a certain amount of expertise, and can you, can you talk a little bit about that?

Nicholas, you're muted. Thank you, I apologize. Madam Chair, thank you. Nicholas Miller again from the National Conference of State Legislatures. Those permanent positions, they are a mix of some general jobs like security guards, maybe 1 or 2 janitors, and there are some specialized data center technicians who maintain and repair the server equipment.

So I would say it's mixed. In general, data center jobs, I think, pay sort of well. They're not some, you know, a lawyer, for example, but the jobs tend to be well-paying and unionized. But they are around $10,000 to $20,000, and some are specialized in data centers, and then others are sort of more general. Okay, thank you for a little bit of background there.

Do we have additional questions for our presenters?

Vice Chair Storey. Thank you, Chair Carrick, and thank you for your presentations today. Through the Chair, I don't know if you looked at Alaska in particularly when you were reviewing states. I— and Amina Sest, we have some limitations on how we're struggling with our own power up here right now. Did anything come to mind when you were looking at your state that you thought we should be looking at?

Uh, Alex McCord speaking to the chair. Uh, so Alaska of course has a very unique energy grid. Compared to the rest of the country. And so I think just like I mentioned earlier, uh, one of the primary reasons for data center siting, um, is the presence of trans— our electric transmission infrastructure and available energy to quickly connect these data centers to the grid. Um, and so that could be more of an issue for Alaska moving forward.

One of the— Alaska is actually getting a bit more of attention with data centers because, of course, one of the issues is cooling in data centers, and there's a lot of thought that locating data centers farther north in cooler climates would help relieve kind of the energy demands for cooling. However, that being said, it's still— these servers are still going to require a lot of energy, and so the infrastructure necessary to connect that is still going to be very critical, uh, regardless of how effective the natural cooling is.

Thank you. Thank you. And a couple more questions, first from Representative Holland and then Representative Himschoot. Great, thank you, Chair Carrick. I'm curious, do you know of anybody who is tracking data center construction and data center site search activities to help us bring some quantification to the demand for more data centers and potentially how to track ones that might be of interest or potential use or applicable to Alaska given its location?

So Alex McCord, through the chairwoman, uh, I don't have the best answer for that in terms of tracking data centers. The best— one of the— there's not a standard, you know, formal tool I found for this, but there is a website, Data Center Map, that probably is the most comprehensive map of data centers and locations across the country. That being said, I believe all the data centers they track are already constructed, and I know you were kind of— it sounded like you were more interested in potential developing data centers. So for that, I don't really have the best tool, unfortunately. Okay, thank you.

You have 4 already in Alaska, 2 big proposed ones, and then there's a Hillcorp one that's not huge though.

And we can, as a committee, look into potentially some of the operators of current data centers in Alaska, talk about the landscape. I think that would be a really great discussion for the committee to have as time allows, obviously, at this point in session. I have Representative Himschoot. Thank you. Through the chair, I just am going to say it again.

I've said this a few times and it's a comment, not really a question, but we We have a ton of natural gas, and rather than— not rather than— if we're unable to build a pipeline to move that natural gas, wouldn't it be great if we could use it where it is and move electrons instead? And so we keep talking about pipelines, and I think rural Alaska could be brought to parity by moving electrons instead. There's never going to be a pipeline to Bethel or Dillingham or any, any of the places in rural Alaska, but we could easily— easily is relative— but we could move electrons, and at the same time we could capitalize on the opportunities of data centers while we're at it. So just a comment. Thank you.

Definitely. And I will also note that there are some ongoing efforts to do more artificial intelligence in AI-related work over the course of the next few months, um, and probably as a state over the next few years. Data centers are a pretty integral part of that discussion, and so I would hope that we can continue this line of inquiry. But today is just kind of an overview to get a sense of what the landscape looks like. Rep McCabe?

Thanks. So yeah, it might be helpful to have a, uh, somebody that could talk to the mechanics of a data center, how it works, what the closed-loop system is for cooling, what an open-loop system, what I found that many people don't know what data centers are. They think it's a place that their data gets stored. They don't understand that it's for Amazon, Uber, Meta, Google, AI, AI training, you know, and they don't understand, you know, all the banking, the trading, the health, healthcare, telemedicine. It's for all of those things.

In fact, if you're on the internet right now, if you're on Facebook, likely you are watching through a data center. And people don't quite understand that. That's kind of the digital world that we've gone into. And as it expands and as AI expands, um, we're going to need these data centers. And they are— many of them are looking at Alaska because our cool temperatures prevent the need for so much water.

And, and they have more wide open spaces. They don't have to build right on top of houses, which is what concerns a lot of people in Loudoun County and those kind of things. So It might be helpful for us as a committee because we're going to see it again, I can guarantee you, to have a better understanding of the mechanics of data centers. Definitely would love to have that conversation. If anybody on this committee has recommendations for people to talk to or invite to come talk to us, I'd be very open to that.

I'm really grateful that NCSL was able to join us today because it was a little difficult to track down who can actually speak to this issue, but I'm really open to bringing others in as well.

And with that said, I just want to thank— or I almost said representative— I want to thank Mr. Miller and Mr. McWard for joining us and for your expertise here. It was really great to have you both, and Thank you for the presentation. Uh, at this time we're going to transition to our other two items on the calendar, but prior to doing that, we're just going to take a brief at ease for about 5 minutes and we'll be back at 4:30. At ease.

House State Affairs is back on the record, and at this time we are transitioning to Senate Bill 237. And, uh, just for committee members' information, we have had one hearing on the companion legislation, which is House Bill 213, from Rep. Jimmy. This is our first hearing on this bill before us. So today we will have a brief introductory presentation on the bill, take public testimony, and then the intention is to set this bill aside for a very soon future hearing. So, um, or I almost said representative again.

Ms. Calhoun, thank you for joining us. The senator is over chairing Senate State Affairs right now, so we're going to excuse his absence here. And thank you, Ms. Calhoun, for presenting the bill. Thank you, Representative Carrick. Jenna Calhoun's staff to Senator Kawazaki.

For the record, our office would like to extend our thanks to Representative Nellie Jimmy's office for working so closely with us on this piece of legislation, sharing information. Their help was key in getting this piece of legislation through the Senate, and now we're here in the House. So yes, SB 237, an act relating to data sharing by the Department of Administration for Driver's License for data verification purposes and providing an effective date. What this does was— will amend AS 28.05.06 to allow the Department of Administration to share data with the American Association of Motor Vehicle Administrators. It amends AS 28.05.068 subsection B to allow the Department of Administration to convey, distribute, or communicate data to a private entity to carry out the provisions of AS 28.15.151, uh, which deals with the sharing of an individual's abstract of their driving record.

And that abstract includes their full legal name, their date of birth, their driver's license number, as well as the state that this driver's license was issued and the person's address. Uh, this legislation further amends AS 28.15.151 by adding subsection G to protect Alaskans' data by ensuring it is only shared with a nonprofit organization, governmental or tribal entity. And to be clear, a private entity can be a nonprofit organization. So there's a difference between for-profit and nonprofit. And when we were going through this bit of legislation, Senator Kawasaki wanted— and Representative Nellie Jimmie wanted to ensure that the private data of Alaskans were protected.

So that's why we added subsection G. But to further To clarify, a nonprofit organization can be also termed a private entity. It's not for-profit though.

Now, why do we have a need for SB 237? Those— these statutory changes make it so Alaskans can apply for a replacement Social Security card completely online. Right now, we are the only state in the union that does not allow for a fully online process, and each year over 15,000 Alaskans do need a Social Security card, and in order to replace this card, they have to travel to either Anchorage, Fairbanks, or here in Juneau. We have a lot of rural residents, and that is an undue burden on them to have to travel to one of these city centers or to mail in their documents to prove their citizenship. So this costs the individual Alaskans, especially again those in the rural state, time, money, and stress.

So what SB 237 will do is modernize the Social Security card process and eliminates this unneeded travel for our rural citizens, as well as unneeded time and stress to wait for their personal identification documents to go through the mail system. At this point in time, I would love to take any of your questions. We also have— we should have Dustin S. Brown, who works with the Social Security Administration, to answer questions as well. Great. Thank you, Ms. Calhoun.

Do we have questions from committee members?

Quiet committee today. Wow. Um, well, thank you, Ms. Cowan. That was a really great overview, and we have heard the companion bill before, so, um, that also helps. At this time, uh, we did have public testimony noticed today, and so we're going to open public testimony on Senate Bill 237.

And I don't see anyone in the room to testify, and I don't see anyone online for public testimony. So at this time, we are going to close public testimony on Senate Bill 237.

Oh, and we do have a question from Vice Chair Storie. Yes, thank you, co-chair. I mean, thank you, Chair Carrick, and welcome. Thank you for presenting the bill today. Do we need to have any technological changes or upgrades to do this?

Like, how quickly could Alaskans expect to have this if we pass this bill? Thank you. Through the Chair, Jenna Calhoun. For the record, Vice Chair Storey, there is no cost to implement this, no technology that needs to be added. In fact, this was a process that previously was used before, but due to statutory changes during the REAL ID Act, it became, uh, with that, not unconstitutional, unlawful to share this information with ANVA.

This is why we are changing the statute. And I have here that it would take only a couple of weeks, uh, oh, 4 to 6 weeks after enactment for a full implementation that Alaskans can expect to be able to do this. Full Social Security card replacement online. Thank you. Thank you.

And then I have Representative Holland next. Great. Thank you. Through the chair to the bill sponsor. So I think part of my question just got answered.

I was trying to figure out, you know, why did we stop doing what seems like a very obvious thing to be doing? But I guess there was some legal advice that said that we couldn't, and so we've been stuck for a while. The other piece of this that I wanted to ask about is I know that there's been interest in expanding the program to allow some for-profit providers to be able to have access to this. I know that issue has been jiggling around the building in terms of advocacy for that, and I'm just curious if the bill sponsor has a position on the request that's been made to allow more opportunities for people to use this. In particular, I think, is for a portal platform for TSA or airport security passage.

I'm just curious for an update on thoughts and concerns about that request that's been made. For the record, Jenna Calhoun, staff to Senator Kawasaki, through the chair. Thank you, Representative Holland. Uh, Senator Kawasaki is still not a fan of this amendment, mostly because when we're dealing with the private data of Alaskans, we do not want to allow for-profit companies access to that.

We have been calling it the CLEAR Amendment. That is the company that you were referring to. They do have concierge TSA, concierge services, kind of like PreCheck. And they also include other things like if you wanted to get into a concert early. Here in Alaska, we already have TSA PreCheck and In our thoughts, it takes $85 to apply for TSA PreCheck, and you can have yourself for 5 years on that list.

When you're working with CLEAR, it's over $200 a year to access those services. And from our understanding, uh, they would only want to operate within the Anchorage airport. So they would eventually expand to Fairbanks and Juneau, but they, they wouldn't wanna operate in any of the other smaller airports. So it wouldn't even— it wouldn't affect all of Alaska. It would be an undue financial burden on those who do choose to do it.

And again, we are very concerned about private data being shared with for-profit companies.

Just to follow up. Follow up? Yeah, thank you. I appreciate that, and thank you for the update on that. You know, I think this bill and what it's doing is appropriate and very beneficial, so I definitely don't want to slow it down in what it's doing.

I do think, you know, the underlying issue, though, is the data security, the data management, and whether it's a private or nonprofit organization, the real issue is how are they going to use the data, and, you know, how is it stored and whatnot. So I think for the moment, You know, this is probably a good, prudent, simple thing to move ahead with, but I appreciate the follow-up that you've made with the other issues that have been proposed.

All right, thank you. And then I have Representative St. Clair. Thank you, Madam Chair. Just a question, Ms. Calhoun. It says that 13,400 Alaskans travel to one of the three locations— Fairbanks, Anchorage, Juneau— to get cards.

How many— is there an estimate on how many this would reduce that to?

Or is there— I guess you can't give me an exact number, but just— would probably decrease it in half, three-quarter, just an estimate, ballpark? For the record, Jenna Calhoun, staff to Senator Kowalski, through the chair. The number would decrease by those who would choose to use the fully online process. I couldn't give it, but I would say most people would choose to go fully online as opposed to waiting in a physical line. For example, myself, I do live in Fairbanks and happen to have a lost Social Security card.

I'm hoping this passes so I don't have to go inside the office, and I would do it completely online personally. Follow-up? Follow-up? Well, the point I was trying to get at is, is we've heard in a lot of the Native villages and out in the bush, they don't even have driver's license. I don't have any photo ID.

So this wouldn't really impact— I was just trying to get a ballpark number if there was an anticipation that this would reduce the number, you know, in half, a quarter. But if you don't have those numbers, that's fine. Through the Chair, Jenna Calhoun, for the record, I do not have that number. It's something that I could try to research and get back to you.

I think it would probably be pretty hard to quantify how many people would for sure use the service. But, but yeah, I see what the question that you're getting at is. Rep. St. Clair. To the chair, if we look at some of the other states that are doing this and see when they implemented it— granted, Alaska is a lot different— but just, you know, one of the other states that implemented it, if we could see numbers on the decrease. And like I said, our numbers that had decreased roughly— and again, you can't— you're apples and oranges when you're comparing Alaska to another state.

However, just overall, in general, you know, nationwide, what, what type of a decrease have we seen? Thank you.

Um, all right, we'll go to Representative Vance. Thank you. And on that, I think it was mentioned before that Alaska did have this at one time, so we could see what the prior numbers of online usage was before the change occurred, and that would give us Alaska-specific numbers. Thank you. Excellent, uh, good suggestion, Representative Vance.

Okay, are there additional questions at this time? Seeing none, we are going to set Senate Bill 237 aside, and it will come up at a future hearing very soon. So, uh, thank you, Ms. Calhoun, for presenting the bill, and to Mr. Brown for being online from Washington, D.C. today. Really appreciate that. Okay, so at this time we're going to move to the final item on today's agenda, which is House Bill 377 relating to public records.

And maybe in a slightly unusual turn, I really just wanted to open the conversation up for discussion with the committee today. Um, there has been a lot of feedback since initial introduction of this committee bill, and, uh, the bill did go through its first committee of referral, Community and Regional Affairs, and, uh, underwent a couple of amendments, and, uh, around that time started to receive a lot of additional feedback about other gaps in our public records law from a lot of various entities, and those were unknown previously. So I'm sure many committee members have heard about some of these gaps too, and this committee substitute we adopt adopted sought to address a couple of those. But at this time, there is quite a lot of discussion around the issues that are contained within this bill, and, uh, we could do one of two things. We could have a discussion and set an amendment deadline today, or we could have a discussion and decide not to do that.

And truly, because this is the committee's bill, I want to defer to thoughts and will of the committee to the best of my ability on that. So I'm just going to open it up for discussion. We don't really have anybody online for questions. We do, however, have Tom Chard, who's our city attorney in Fairbanks, who can kind of speak to the underlying bill and why it was originally brought forward, some of the issues there. But other than that, this is really just our opportunity for discussion.

I will note for the record that we were just joined by Senator Kawasaki, and we just finished your bill, but thank you for joining us.

I'll go first to Rep. Pimshute. Thank you, Chair Carrick. I might be a little lost in the process. I have an amendment to the bill that I don't know if it would be helpful to discuss now whether that amendment would be welcome.

But I have to kind of work from memory about exactly how the amendment works, but happy to talk about it. Or if you, um, Rep. Himschute, if you want to kind of describe the amendment, um, as part of the discussion. Essentially what I'd like us to get to, the, the goal I'd like us to get to today is just deciding if this is a bill we would like to set an amendment deadline for and continue forward with So if you'd like to describe the amendment so we can get a sense of it, that would be fine. Sure. What you might bring forward.

Yeah, so we took the advice from— I don't know about advice, but information from AML, from Nils Andreassen, and he referred to federal code where there are tiers of information, and we took those tiers and drafted an amendment. And my, my aide who worked on this amendment is coming down. Thatcher will be here in a minute, so I hope I'm getting this right. And he's probably in transit and gonna not hear what I say and be able to correct me, but it says that if you are using— if your request is related to a commercial use then you can be charged. The problem with the amendment— I don't know about problem, but right now I think, and this is what Patrick can help us with, the amendment says everybody else, all other uses, are where we left them.

But if you are a commercial user, you can be charged. But I think that the 5-hour trigger is not impacted. I think you still can't charge anybody up to 5 hours, and then after 5 hours you can charge for commercial. I think that's how the amendment works, but Thatcher will know exactly. And the idea is to— because the, the 5-hour issue seems to be about these content creators who are burdening the system for commercial purposes.

And so the goal of the amendment, I think it takes out the original thing which was to allow discretion in charging and leaves it that you don't charge until 5 hours. But if you're a commercial user, you will be charged, I think, for anything over 5 hours. Thatcher can confirm that I've got that right. But the idea was to separate out types of requests. Um, and Representative Himschute, I did speak with your staff earlier today, and I believe that the commercial would apply— here he is right now walking in— I believe that the commercial, um, ability to charge would still apply for 5 hours and under.

So the 5-hour exemption would still be impacted, the current 5-hour exemption. Um, but we can also bring him to the table if we'd like. And just for the record, for clarity, we're not discussing an amendment that's currently before us. We're just— this is an idea that may be before us. But sorry to put you on the spot, but Mr. Brower, would you, um, care to describe the idea that Representative Himschoo has run through legislative legal?

Relating to the public records bill. Yes, Thatcher Brower, staff director for HIMSSCHUT for the record. And I'll do my best to describe the amendment we were working on. I don't have a copy in front of me. But the idea or the concept we're working on is to create two classes of requesters.

And one would be a commercial requester who are clearly requesting.

Information for profit, and the other would be individuals and news media and other entities such as a nonprofit or a research institution that would be requesting the information for a public purpose. And the further— in addition, the— we would charge, or the municipalities and the Department of Public Safety would be able to charge the commercial requesters for work they did that was less than 5 hours. And the way the amendment was drafted, the other requesters would get that— the first 5 hours for free.

Thank you for summing that one up for us. Chair Carrick. Representative Himschoot. Yeah, I think the needle that we're trying to thread is— I really took to heart the public testimony we heard about Freedom of Information and people, you know, access to information is really critical. So wanting to remove those barriers, but also wanting to make it functional for DPS and for municipalities to be able to exercise discretion for burdens on the system that are, that are frankly new as far as people wanting to obtain information for commercial purposes.

So that's I guess the needle that we're trying to thread. One of the needles we're trying to thread, yes. But thank you for your work on this so far. I was really bad at keeping a queue earlier. Do we have other comments?

Representative St. Clair. Thank you. Through the chair, two things. One is I thought I had a legal document because separating those out by commercial, non-commercial or a constitutional issue with—. Now I can't remember what it was—.

Equal protection, because we're singling out a single one. Now, when Rep. Hemphill, what she was talking about, I think we had a discussion about that, about breaking down into tiers, which I wouldn't be opposed to. However, my biggest point of contention right now is the fiscal note. Or $2 million for fiscal note on this. Um, do I think it's accurate?

Oh, I'm just going to leave it at that. Um, I, I think we do need to do some reforms. I've gotten emails in support of the 5-hour exemption. Um, but, uh, just charging one type of organization, organization that being commercial, whether they're Alaskan or non-Alaskan, and again, then We get equal protection under the law questions. I just don't think that this is ready to go.

I mean, I'll do the will of the committee. If we want to keep going, do amendments, et cetera, et cetera, I'm willing to do it. I just don't think that— we still have too many unanswered questions, and we have a lot of new stuff popping up that we didn't see before. Thank you. Thank you for those comments.

And I would have to see a legal memo on the equal protections issue. Because we don't have an amendment in front of us, we— It would be good to see that though if there's concern there. I'm going to go to Representative Vance and then we'll come back. Representative Vance. Thank you, Madam Chair.

I was under the assumption that we did have an amendment deadline, and so I actually was paying attention to this one and got my amendment in. But I requested— the focus that I had was around your constituents' concern with the the, the body-worn cameras and the families being able to access that. And, uh, so I drafted it with a balance of, uh, the victim's rights but also protecting the due process for justice in the courts. And the draft that I have says that they get a priority— the, the victims and their families get a priority before anyone else. And it's explicit in the draft for that.

And I did send it to DPS to see what they thought of it, because I want to make sure that I'm not impeding anything that they're doing. And, um, and they didn't see any issues with it, which I thought was helpful. So that we sent to your office. But, uh, it's, it's a more robust paragraph, but nonetheless You know, I wanted— I'm hoping that it achieves what you were looking for that says, "Hey, this is confidential." They must, upon conclusion of investigation and final disposition of a related criminal case, be made available for viewing by the victim or victim's immediate family upon request. May be released to the public, including members of the media, after the requirements of 2 have been satisfied.

But it also says that, uh, it isn't invading other people's personal privacy, doesn't create harm to other people who may be in the, the video in protecting their rights as well. Uh, so, and doesn't compromise an investigation. So again, when we have that, we'll be able to discuss the merits of it because when we're look— when we're talking about these police-worn cameras, um, there's so much involved in whatever that scene is that you have, you have the victim, you have bystanders that may not have been directly involved in whatever the incident was, and then you have the officer. And I wanted to make sure that we are taking into account every individual that is within that before something is released. And so I'm hoping that, that this amendment covers it.

—So that we can move the legislation, because I understand that this is really important to families who are needing some closure right now.

Thank you, Representative Vance. And I don't think we set an amendment deadline. There was a lot of amendment deadlines, though. So thank you for working to get what you wanted to drafted. Representative Himschoot.

Yeah, I just wanted to— With the amendment that we did have drafted, we did not get a legal memo with that, so I think if there was an issue, um, we would have gotten the memo. We certainly can check. Okay, that'd be helpful. I have Representative Holland and then Vice Chair Story. Great, thanks.

Um, I guess a bit of a question and a comment. The fiscal notes that showed up were surprising, and it led me to be curious about what's currently going on that having this requirement was going to generate such a fiscal note. And I guess there's some current uncertainty or discretion allowed by the Department in providing this video that all of a sudden putting a time requirement on it creates a massive fiscal note. But it just leaves me wondering why we got into this situation that this information wasn't available in a more timely manner, and it is now going to cost us a significant amount of money to make it available. So I guess I am learning about this issue.

It makes me wonder, though, about, you know, whether or not layering this into this bill was the right thing to do. It sounds like this was an important issue, but it is now distracted from being able to simply deal with the cost problem of our local boroughs that were getting burdened with trying to supply this information, and going from helping those locations collect some money to all of a sudden now creating a massive fiscal note. Now we've got to spend a bunch of money. I'm just kind of surprised at the turn that this took and whether or not we should back up and take care of the original problem without creating a new one. But I suspect that there's some folks that really want this new aspect of this bill to move ahead.

I do, at the end of the day, still have a lot of misgivings about the fact that we've not put in some sort of cost recovery into this formula like we've seen with DPS that had that per-transaction cost. Remember, they went through the calculation of the software cost divided by the request, so they had a fixed amount for every single time you requested some video, you got charged for it. And our bill is not explicitly providing that opportunity. It's still allowing folks to game the system, to put a request in, and if it comes in at 6 hours, they can cause the department to have to go back and come up with another request until it gets under 5 hours, and then they get it free. And so, I'm just reluctant to see us creating a public video production institution.

I would rather have seen something that really tightened this back down to, you know, only the essential people that need and have good use of this—victims, the Justice Department—get access to this stuff and not get into becoming a public video distribution organization. I just think this has gotten out of control. As much as I love free enterprise, our state, our public services are not designed to be creating content for the rest of the world to enjoy in their doom scrolling. And how we've gotten caught up in this, and now we all of a sudden feel like we have an obligation to provide this information, I just, I think there's a place where we got off on the wrong track. So I'm uncomfortable with where we've gotten to at this point, and yet I'm sensitive to the original request, which is to help out with the cost impact of these local jurisdictions.

So I don't know where to go with that at this point. I'm just concerned about where we're at right now. Wow, dude, that was 7 minutes.

It's without a breath. That's amazing.

Representative McCabe, I did not call on you. My apologies. Just a couple of thoughts. I'm exercising a little bit of latitude since I am carrying the bill. One, I, as with other fiscal notes that we've gotten on other bills, I would kind of echoing Representative St. Clair's earlier comments, I would somewhat question a $2 million fiscal note on this bill for just AST.

That seems a bit astronomical considering the narrowness of the original— the amendment that was brought forward. Secondly, since the earliest hearings of this bill, we have heard from public media who are concerned under financial restrictions, as I'm sure other members of the public may also be. That a strict exemption from the 5-hour rule for municipalities may not— may have some unintended impacts. And so there's been quite a bit of recent potential concern around that. So I think we're, again, trying to thread a needle that's really difficult to thread amidst a public records statute that's really outdated.

And I agree with a lot of your comments too. I just was going to add a couple of thoughts there. I have, let's see, Vice Chair Story and then Representative McCabe, and then I think we will have gone around the whole table. So I'll go to Vice Chair Story. Thank you, Chair Carrick and the committee.

I think I liked your comments about going back to the original intention and not— and continuing to work on it and have something come out from this committee as a recommendation, because I think it is so important providing access to the recordings. And with the use of force to family members. And with— so I think it's worth some more work and looking at it to see how we can clean that up and not make the fiscal note so big and get to the original intention of the bill. That's just comments I wanted to share. And Vice Chair Story, just to kind of bring us back up to speed, so the original bill is a— just an exemption for municipalities for the 5-hour rule, which says that if you request anything up to 5 hours, it's free.

And so by exempting municipalities from that and Alaska State Troopers from that, we are saying that they could charge up to the cost of production and redaction. The fiscal note on this legislation came from the committee substitute where we added language establishing timelines for specific instances of force. That's where that fiscal note came from. So if we were to get back to the original bill, we would likely reduce the fiscal note. We would also be not responsive to a really strong concern in the community.

And so I think there's kind of— there's a couple things happening here. And then additionally, the original bill And the committee substitute updates what the definition of a public record is. So we've included some not very new technologies, but certainly the record statute was outdated to begin with. Anyway, just wanted to offer that that's— those are the two ends of the spectrum we're kind of talking about here. Thank you, Chair Carrick, for that.

And I guess my comment to that was And, you know, that's a question just going back to how long have we been taking, and I know that has been a variety of, you know, depend on in particular instances. So thank you. Thank you. And Representative McCabe. Yeah, thanks, Chair Carrick.

So this, it would be worth having Commissioner Cockrell here to talk about the fiscal note. I've heard this. I was on Community and Regional Affairs a couple of years ago when he put the instituted the body cameras and how much it was going to cost, and I don't think we ever gave him the money for it, the DPS, and I think that they were able to absorb the cost of the technicians that it's going to take to redact all the stuff. But now that we're putting a timeline on it— because we didn't have a timeline, they could just kind of do it as they needed to— so it would be worth hearing about that to see if that's what exactly caused the fiscal note for, for, uh, for technicians essentially. I do remember that piece of it was the most expensive piece was redacting.

Yeah. And we do have to wrap this discussion up pretty quickly, but I'm going to go to Representative St. Clair. I think— thanks, Madam Chair. I think the main cost that shot it up was they added like 4 troopers, $1.6 million or something like that. And something we heard in testimony— I'll make it quick— is people wanted to see the unedited version.

It's gonna get redacted. They're not going to get the unedited version. So that was some of the testimony and some of the other things that we heard. The gentleman that has been waiting for a long time, he wanted to see the unedited. That's just— it's a privacy concern.

So I just want to bring that up. Yeah, and, uh, thank you, Representative St. Clair. That, that particular request is not really something that we can honor as a committee given privacy issues and other legal concerns. So it's not addressed in the committee substitute, but it is a concern that some folks do have. I'm just going to take a very brief, brief at ease, and then we'll be back on the record.

House State Affairs is back on the record, and we had just taken an at ease to kind of have a little bit of dialogue, but the summary for our, um, for the committee, uh, and I just want to thank committee members for weighing in, everybody weighing in on where you're at and some of the considerations here. Uh, House Bill 377 certainly has opened up a little bit broader of a discussion than originally anticipated around public records. Timeliness of receipt of public records for different entities, access to public records, and also the growing concerns of municipalities and public agencies to provide those records. So considering all of that in the discussion today, the intention will be to bring this bill back before the committee and have continued discussion and question and answer with a couple of, uh, invited experts. And, um, potentially consider some of the areas for amendment with the legislation.

And so with that, today we are going to set House Bill 377 aside, um, and thank you again to the committee for, um, undertaking a candid discussion on the record about some of these issues. I really appreciate it. Um, at this time we are going to adjourn House State Affairs. Our next meeting is Thursday, April 30th at 3:15. And our current agenda includes hearing our other House State Affairs Committee bill, House Bill 379, on road service areas, a first hearing on House Bill 281 from Representative Sadler on penny transactions, continued hearing on House Bill 218, the Tanana Valley Forest Bill, and a first hearing from Representative Costa.

On House Bill 187 on Ledge Council membership. And with nothing else before us, we're adjourned at 5:12 PM.