House State Affairs, 4/30/26, 3:15pm

ប្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រាន្រ අපි ස්තූතියි ទ្ទ្ទ្ ទ្ទ្ទ្ I'd like to call this meeting of the House State Affairs Committee to order. The time is currently 3.18 on Thursday, April 30th. We're here in room 120. Members present include Representative St. Clair, Representative Holland, Representative Himshue, 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 LAO is Renzo Moises. We also have our committee aide for today's hearing, my staff, Stuart Relay. Ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ ὅᾶ � I am setting an amendment deadline for SB 237, which is from the Senate State Affairs Committee relating to Social Security data sharing for Monday, May 5 at 5 p.m. We'll make sure to get that out to all the committee members as well.

That bill is one that we've heard a couple of times, and we've heard the companion legislation as well. Okay, so then we'll go to our first item on the agenda, which is HB 379. I'll turn first to my staff, Mr. Relay, if you could please give us a brief reintroduction of the legislation. And I'll also just note for the record that we have Jill Dolan, who is our attorney for the Fairbanks North Starborough here in person.

Thank you for joining us. And we have just Ms. Dolan at the moment, but we may end up having a couple others join us too. So I'll turn to you, Mr. Relay.

Thank you, Madam Chair, for the record. Stuart Relay, staffed for Representative Carrick. House Bill 379 is a bill by the House State Affairs Committee by request of the Fairbanks-Northstar Borough relating to service areas. Just again to briefly recap it.

It's a targeted common sense update to Alaska log governing borough service areas.

In large boroughs like the Fairbanks North Star Borough, barriers have resulted in road service areas and subdivisions that cannot be incorporated into existing service areas. This will allow for an easier process for road service areas to be formed and to be added to other road service areas as well. And that's a very kind of 10,000-foot view. I would also just reiterate what Chair Carrick has said in previous hearings. This is the "if you like your road service area, you can keep your road service area" bill.

And I'm happy to answer any questions or have our friends, our invited testifiers, answer any questions. Um, thank you for that reintroduction, Mr. Really. Um, and we have heard this bill a couple of times, and I think we have a lot of overlap in this committee with the prior committee of referral. But I will open it up to questions. I also just note that Vice Chair Story joined us at about 3:20 PM.

Thank you. Are there questions on the bill? Representative Holland. Great, uh, thank you. Through the chair, maybe to the chair, just curious if there's any updates in terms of submitted testimony or comments from any of the other boroughs that are affected by this.

Mr. Reilly. Thank you, Madam Chair. For the record, Stuart Reilly. Representative Holland, we are still working on getting some more public feedback from other boroughs. I would say that Alaska Municipal League has submitted a letter of support that has been distributed to the committee.

But we— I don't have anything in writing from other boroughs at this point, I would say. Thank you. Thank you. Uh, Representative Sinclair, just to—. Thank you, Madam Chair.

Just for, um, Rep. Holland's edification, I've, I've gotten something back from— I'm trying to get you— get a formal letter in from the Mat-Su Borough. They do not oppose this. Um, they've relayed that to me, but I'm trying to get approval for a document to get put on the record. Perfect. Thank you.

All right, thank you for that question, and we are continuing to do due diligence to try to get the other boroughs to officially weigh in if possible, second-class boroughs to officially weigh in. Um, I'll also just note that we have a representative from DCCEd who has also joined us online. Is there any additional questions at this time?

Okay, um, thank you to the committee. Uh, we are going to set an amendment deadline for House Bill 379 for Monday, May 4th at 5 PM. So again, that'll be this Monday, May 4th at 5 PM, and we will make sure to communicate that with all, all members. And we are going to set aside House Bill 379. Thank you, Miss Stolen, for joining us in the audience.

And that will bring us to House Bill 218 from the Governor's Office relating to an expansion of the Tanana Valley Forest. This is our second hearing on the bill, and today we have continued discussion on the agenda as well as public testimony. I will also note that we are joined in the room by Jeremy Dowse, who is the Director of the Division of Forestry. Do we have— I'll just open it up first. Do we have any initial questions on House Bill 218?

If not, I do. So I'll welcome, uh, I'll welcome our— oh, he's online, never mind. So, and I also note, uh, let's see, okay, we have a couple folks for testimony, it looks like. So I have a question for Mr. Dowse.

I'll just hop in the queue first.

[FOREIGN LANGUAGE] So included in this bill packet is a letter that I think was initially sent last September from Fort Wainwright, and it expresses concerns about certain parts of land in the bill.

I just wanted to know if the division had prepared a response to those concerns since September and what the willingness would be to potentially make changes. For the record, my name is Jeremy Dowse. I'm the Director of Division of Forestry and Fire Protection. And thanks for taking time to hear this bill again. That's correct, Chair Carrick.

There was a letter from the Department of Army, U.S. Army Garrison Fort Wainwright, about some parcels down near Delta Junction. And what that is all about is there's a history of fire in that region and when there's a fire, it has an impact on their ability to train using the impact area and do live fire training, like firing weapons. And so there's some parcels in there that are classified for settlements or disposal and they're managed by the Division of Mining, Land and Water. And the Army would like to see those added to the state forest because that's a compatible land use adjacent to their to their property. So that if, you know, their concern is that if the land was sold to private property, they would be at risk in the event of a training event, a fire.

Whereas if it's in a state forest that's managed for stewardship and for timber, that would be more of a compatible use.

Okay.

Um, thank you for that, Director Dowse. I guess, um, as a follow-up, is there an amendment that we would need to make to this bill to facilitate that use, or is, is that something that can be arranged potentially after implementation?

I, I believe, um, that that would have to be an amendment to the bill. Those would add— those would be additional sections within two townships that would have to be added to the bill.

Okay, thank you for that information. I have a question also from Representative St. Clair. Thank you, Madam Chair, and to— I didn't catch the gentleman's name on the phone. What about UXOs, unexploded ordnance, especially if this is a training area, uh, etc., etc.? Director, through the chair, Representative St. Clair.

So this is off the installation and north of, north of the installation. It's on state lands. Um, the impact area where there would be UXO is further south.

So we wouldn't expect to see unexploded ordnance in these areas. Okay, thank you.

And I have Vice Chair Story next. Thank you, Chair Carrick, and welcome. Through the Chair, can you— and this might have been said before— but can you tell me how other local communities and land users have been consulted? In this process and— or in this proposal, I guess I should say, and if there have been any other cautions that you have had or things to look at.

Through the chair, Representative Story. Yes, so we have had multiple interactions with the communities throughout the Tanana Valley on this topic. It started back when the area plans were revised, I believe in 2014. The language in the area plan states that these areas are classified for forestry and that the recommendation in the area plan is that they be added to the state forest. So there's that public process that went, that we went through, that DMLW or the Department of Natural Resources went through.

Additional to that, when we updated our, the state forest management plan, that language was added into the plan that these parcels are classified for forestry and that there is a recommendation that they be added to the state forest. So that was a public process. And then more recently, just this last summer, in kind of preparation for this legislative proposal, we went to Nenana, Fairbanks, Delta Junction, and Tok and had an online public meeting as well to discuss this topic. So the questions that came up, I would say, that the public, generally speaking, is very supportive of the idea. And I think that's because the state forest has been in existence since 1982.

And so they're used to the type of management that occurs on it. The questions that came up were pretty technical in nature. You know, things like, how does this work with the carbon, the new carbon legislation? Some very technical questions about land management in terms of the Forest Resources and Practices Act. There was some concerns about timber being exported rather than being used in local markets.

Those were the types of comments that we received.

Thank you for that.

And then I guess I have one other question, Director Dowse, which is I know.

[Speaker:COMMISSIONER_KARUBAS] Every parcel here is a little bit different probably, but in general, are the parcels proposed in this legislation for inclusion in the state forest similar land use status? Like, could they be used for timber management in general, or would this be a new use purpose for a lot of those parcels? [Speaker:MR_KELLY] Chair Carrick, Most of these parcels are all currently classified for forest use. And we are, in some of the parcels, we're actively managing them. So we're putting out timber sales, building roads, that sort of thing.

So they're all classified for forestry. So the management that the public sees on those parcels would be similar to, if they were included, it would be exactly the same if they were included into the state forest. Forest. Okay, uh, a question from Representative Holland. Great, thanks.

I appreciate where the questioning was going through the chair because it's been, I think, my ongoing question about this. Since I understand these parcels already can and are being managed for forest, I'm still trying to figure out why there's a motivation to put them into the forest if they're already managed for this use. I just— I think— and I guess I'm going to be kind of stereotyping— I kind of think of this administration as one that has kind of stayed away from forest designations and other dedicated uses, wanting to have more flexibility for state rights and state development of land. And it seems like leaving it as state land, since it's already managed for forest use, accomplishes that goal. And it would seem on the surface to me like it's useful to keep it with more flexibility for the state and the state's rights to develop the land rather than to put it into a use that would seem like it would be more limited.

And it just kind of seems a bit contradictory, but perhaps I'm missing something really fundamental here on this use of land that's designated for forest use, but now we want to put it into the forest.

Through the chair, Representative Holland. It's a good question. So I would say forestry is a long-term investment, right? It's a renewable resource. So when we do a timber sale, we monitor the revegetation or the reforestation of the site and set it up on a kind of a trajectory so that in the future there'll be another crop of timber on that same site.

Now in doing that, we're building roads, roads and bridges, and we're committing money to reforestation efforts and doing plot work with people. And all of that is an investment, a long-term investment. And so if it stays forest classified, some future planning process, it could be reclassified to settlement or to agriculture or to some other use. So those investments that the state has made would be essentially would be either lost or they would be used for some other purpose. So when we make those investments in a legislatively designated state forest, that land, in theory anyways, is managed for forestry purposes in perpetuity.

Follow-up? Just a brief comment. I just, I I appreciate it. It's a very forward, progressive, dare I say liberal view of managing our public lands. So I'm supportive of this, but I'm just still a little mystified.

But thank you for that answer and for the work you're doing to manage these lands.

And then we have a question also from Representative Himschoot. Thank you, Chair Carrick. My question has to do with roads. Places that would be added, is there already road access? Some of them are right along existing highways, but are there forest roads in the— I'm looking at a map that has green and then kind of a yellow-orange section for the parts that would be added.

So do the green sections already have roads in them that would reach to the sections looking to be added?

Through the chair, Representative Hempschute. So the green areas, and I'm looking at the same map now, the green areas that you're looking at, many of them do have roads, some of them don't. We're still working on our initial roads, our infrastructure on it. We have a roads plan that covers the entire state forest. So we're still working on that as we add timber sales to the schedule and build road to get to those areas.

The yellow areas are similar. Some of them do have roads in them. Some of them don't yet have roads in them. If you look at places like P-48 down near Anderson or D-21, which is just to the west of Delta Junction, those areas do have roads and we do active management in them now. But areas like down near Tope, U-65 and U-66, Those areas don't yet have roads, but we would envision, you know, in the, in, in the near future having roads in those areas just based on the management that we're doing there.

OK, thank you. Thank you, and Vice Chair Story. Thank you, Chair Carrick. Through the chair to the director, you had answered that one of the concerns in my earlier question was that the timber would all would mostly be exported rather than being used here. And could you comment on what your response was to that concern that you heard from the public, please?

Thank you.

Sure. Through the chair, Representative Story, so the markets that we had— so markets change from, you know, not rapidly, but they do change on occasion. Right now, Everything in the Tanana Valley is going into a local market. There is no export that occurs. There has been in the past for a very brief period an export opportunity coming out of the Tanana Valley, but that was a one-time thing.

I wouldn't envision, and this is how we responded, I just don't see anything happening kind of in this global timber market that would push for export right now, but certainly things can change. Thank you.

All right, I don't see any further questions, so at this time we're going to go to public testimony, and we're going to open public testimony on House Bill 218. And we have first Tom Malone, who is joining us from Fairbanks on Teams. Or sorry, from the Fairbanks LIO. Thank you, Mr. Malone. If you could put yourself on the record and proceed with your testimony.

Oh, Madam Chair and members of the State Affairs Committee, my name is Tom Malone and I live near Fairbanks. I'm the chairperson for the Tanana Valley State Forest Citizens Advisory Committee. The purpose of the Citizens Advisory Committee is to provide a forum for the expression of opinions and to provide recommendations to the Division of Forestry and Fire Protection on matters relating to the management of Tanana Valley State Forest. The committee is comprised of 12 people representing private users, fish and wildlife interests, recreation, native interests, environmental interests, forest science interests, mining, forest products, the logging industry, tourism, and regional interests. That's who the 12 of us represent.

The CAC submitted a letter last May to the governor and the commissioner of DNR supporting the expansion of the Tanana Valley State Forest. Our committee's vote was unanimous and supported the expansion. [Speaker:ROBERT] While the lands that have been selected for expanding the state forest are all designated as forest lands, they're managed as general state lands and can be put into other uses. Adding these lands to the forest will reduce the conflict with other land uses, such as establishing a subdivision near a logging area, which has happened, certainly. Forest management activities such as logging and road building and regenerating forests provide many benefits to Alaskans.

Forest management promotes healthy wildlife habitats, more animals per acre. There's more access for our lands for recreation such as hunting, berry picking, hiking, biking, skiing, and dog mushing. Forest management activities improve wildfire response times also, and they break up large fuel types, reducing the occurrence of large fires. Adding these lands to state forest will provide certainty for the forest products industry, allowing them to secure long-term investments and grow the industry in interior Alaska. So I would ask the committee to support the expansion of the Tanana Valley State Forest, and I ask you to encourage all of your fellow legislators who support the expansion of the forest.

Thank you very much for allowing me to testify.

Thank you, Mr. Malone. Appreciate.

You calling in today, and thank you for your work with the advisory committee, Citizens Advisory Committee. We'll go now to Joe Young, who is in Tok. Thank you so much for calling in. If you could put yourself on the record and please proceed with your testimony. Thank you, Madam Chair, and the State Affairs Committee members.

And for the record, I am Joe Young, owner of Young's Timber Inc. in Tok, Alaska, and have been operating in the timber industry for for 33 years within the Tanana Valley State Forest. Young's Timber Inc. is a generational business, as it's me and my kids and my grandkids are working with it. I highly recommend that the State Affairs Committee pass HB 218, proposed expansion of the Tanana Valley State Forest. This expansion will protect the boreal forest from other risks such as agriculture and development and subdivisions, which would hinder multiple use. This bill will reduce state costs as it eliminates both Division of Forestry and Division of Lands and Interdivision employees working on timber sales, so both divisions can concentrate on the divisional resources in their expertise areas.

During this budget crisis, it's important to consider ways to reduce state expenses, and this is one. The expansion creates a larger timber base for capital investments into the timber industry. Youngs Timber Inc. has just invested in 2026 $939,000 and plans to invest another half a million dollars when SB 188 and House Bill 218 passes and the governor signs the legislation. The timber industry needs access to a stable, long-term supply of resources for growth and response to new markets. Such as this spring, I got a call from a company that's working on the gas line, and they want 17,000 4x6x10s to stack all the pipe on, which would be, you know, a good new market for us.

Young's Tin Grape couldn't do this, these many by itself. It would help with the Fairbanks and Dry Creek mills that so we could manufacture all these timbers for pipe dunnage. The primary state purpose of the state forest is timber while incorporating multiple use. The last 33 years that YTI has been building logging roads and skid trails, the multiple use users come in right behind us to pick berries, especially blueberries and raspberries, trapping, trail walking, hunting, even beehives and many other uses. Harvest creates access for fire protection, which is extremely critical to controlling fire.

The state forest units that Youngster Brink has harvested has dramatically increased moose browse habitat and increased moose along the Tolk River Valley. Thank you for allowing me to testify, and please pass House Bill 218. Thank you. Thank you, Mr. Young. We have a question for you from Representative Holland.

Great. Thanks for joining us today, Mr. Young. Through the chair, I just was wondering if you could just share a little bit more about the road construction process from your perspective. I've been a little uncertain about whether or not if this new land is designated, whether that's a state obligation to build the roads, in which case it's, you know, something we need to look at in terms of the allocation of capital, or whether it's set up such that this land, if designated under this state forest designation, are those roads something that you are actually building as you need to in order to access the timber stands that are available to you and you have more control over that? So who builds the roads and how does that work in terms of your role if you are involved in either helping designate where they should be, or perhaps maybe you're actually putting them where you need them to get to the best sources of timber.

I would love to know your experience on that. [Speaker] Okay, well, first of all, the industry and the Division of Forestry work together very well to, when they lay out the timber units themselves and put the prescriptions in, is that there's always road designations. Now, if we're doing a mainline road, The Division of Forestry has road requirements that we have to build the road to a certain standard. Okay, then once we get off the main road, then we build skid trails to move the logs. And so that is a lot less detailed, and especially in wintertime when you're just building winter roads where you don't break the vegetation mats and use the snow to pack down across, and the Same as ice bridges, we build the ice bridges ourselves to the state Fish and Game standards and the Forest Practices Act standards.

And so it's basically the logging operator constructs the roads under the supervision of the Division of Forestry. And then it's their call whether we put the roads to bed or not. But in the upper Tanana area in the boreal forest where we live at, Most people, I'd say 95% of the people want the road left open for recreation, gathering, hunting. And so, like I say, as soon as we're building roads, we have the multiple uses coming in right behind us. And so that gives them access to more gathering or hunting or whatever they want to do.

So the main problem I think is where we could use some financial help is with a couple of bridges. If a couple of temporary bridges could be put in, that would access so much more timber and keep the cost way down. Because up in the Upper Tanana, in the Tanana River, it's hard to make an ice bridge because we're at 1,500 feet. Fairbanks is at 400 feet. So the water's cascading down and it's so swift It's hard to build an ice bridge.

I think we have another follow-up. Great, thank you, Chair Carrick. Just a short follow-up, because I think, Mr. Young, you answered most of my follow-up question, but I just wanted to confirm that the roads that are constructed, it sounds like, with your effort and cost, but once they're done, those roads are not blocked off or chained or somehow restricted once they've been built. They are available for public use, is that correct? Or are there some limitations about when they're closed down?

[Speaker:DAVE] No, that's as far as we know, that is a decision that's made by the Division of Forestry, whether to close the road down, keep them open, or how they would like to handle the road situation. I think the biggest problem with keeping the roads open after the logging operator leaves is the maintenance of the road itself after we're gone, 'cause once we're gone, we don't maintain the road. It's great. Thank you. And Mr. Young, we have another question for you from Representative Himschute.

Thanks for sticking on the line. Thanks, Mr. Young. Thanks for your testimony today. Through the chair, I'm curious— I hope I didn't miss this— but what is— what is— what are you producing from the timber you harvest? And are you the only operator on the Tanana Valley Forest?

Are there multiple folks harvesting the timber and Yeah, just kind of a sense of are you running out of timber to harvest and is it going into biomass, is it going into lumber, is it pulp, what's the wood used for?

Well, what we try to do is take a holistic approach to the tree and that we harvest. The main thing I think is that Young's Timber Inc. is the furthest east in the upper Tanana Valley, in the whole Tanana Valley. We're the first furthest on the east end. And then there's sawmills at Dry Creek, Delta, Fairbanks, and smaller operators all up and down, uh, uh, clear to, uh, Tanana. So, uh, yeah, there's multiple logging operations.

So probably Jeremy can tell you how many there actually are. And then this Other thing is, is that what I produce here is I'm not just a value-added sawmill, I'm a value-value-added sawmill. So what we do is, of course, we harvest the trees, we bring them into the sawmill, we process the logs into saw logs, and then we have 4 different types of sawmills. We have a Wood-Mizer bandsaw that I could cut 12x12 beams up to 32 foot long. I've got a big, uh, high-producing Heli cant mill that cuts up to 10x10s to 16 foot long.

And then I have a Pendoo gang resaw that you change the tool.

In so I can produce surface 6-inch house logs, surface 8-inch house logs, 2x6, 2x8, log home siding, and tongue and groove boards. And I just purchased— in fact, it just arrived last week— a new Woodlander sawmill that takes small round logs that are 8-inch butts and smaller to mass-produce 2x4s and 4x4s and 4x6s. And then, then the slabs, we bundle our slabs and we sell our slabs for firewood. And we're in the process, we have a USDA Forest Service grant to produce a fuel log, which we grind our sawdust and our slabs into, and under pressure we make a fuel log that's 4.5 inches. Well, hope, we're hoping it'd come online this year, if not next year for sure, but it takes all the sawdust and slabs and we grind them up and we make a, like a, presto log type thing, but it's better than a presto log, but it's 4.5 inches in diameter by, uh, 16 inches long.

So our goal here at Young's Timber is to holistic utilization where we use every bit of the tree.

Thank you. Thank you. Um, that was a really interesting deep dive into your industry, um, and what your scope of work is. I appreciate you calling in.

And Madam Chair, I would invite anybody and everybody that's coming through back from Juneau or in the state of Alaska to come by, and I'd gladly give them a tour of how the operation works. Awesome. Thank you. Thanks for the offer. I drive home that way, so I might take you up on that.

Okay. Well, I appreciate that. All right, um, so we are still technically under public testimony. There is no one else online for public testimony. I don't see anybody in the room that's here for public testimony.

So at this time, we're going to close public testimony on House Bill 218, and I am setting an amendment deadline for this bill for Monday, May 4th at 5 PM. So again, we will send that out to everybody. I'd also just like to note for the record that Representative McCabe joined us at about 3:50. PM. And the next item on our agenda today is House Bill 187 from Representative Costello relating to membership on Legislative Council as well as the Legislative Budget and Audit Committee.

This is our first hearing on the bill today, and we're going to have an introduction of it from the bill sponsor, and then the intention will be after committee discussion to set the bill aside for the future for a future hearing. So I'll welcome Representative Costello and her staff, Zach Young, to put yourselves on the record and tell us about the bill.

Thank you, Madam Chair and members of the committee. I am Representative Mia Costello in District 15, and I'm here with my aide Zach Young, who is going to help explain the bill today. House Bill 187 was actually introduced by the minority leader in the other body prior, before his departure to run for higher office, and he had approached me to introduce the version on the House side. If you look at the bill, it's fairly straightforward. It's 2 pages, and essentially what it does is we have 2 committees whose membership is dealt with in our statutes.

I mean, there are some other committees that are dealt with in statute, but in this case, in this bill, it has to do with the Legislative Council and the membership of the Legislative Budget and Audit Committee. And essentially what it lays out in statute is the membership of the— these two committees. And when it comes to the representation from the minority caucuses, it actually mentions in the legislation from each of the two major political parties. So, it— it's a party affiliation-based— membership requirement. And so when the member from the other body and myself looked at this, we thought that when you, when you consider the fact that we've got some coalitions, we've got individuals, you know, for example, when I served in the other body, we had the member from Bethel.

He joined the majority caucus, so party affiliation wasn't necessarily the route that best allows for a minority viewpoint to be represented. And so essentially what the bill does is it takes on line 8 and 9 and just replaces that the membership from each house shall include at least one member. It replaces from each of the two major political parties to from the minority. And then it does the same for the Legislative Budget and Audit Committee on page 2, line 8, where it replaces again, um, from each of the two major political parties to the minority. This would be the minor— an established minority, a recognized minority, which is also, um, defined in law, and that's at the bottom of page 2 where it mentions that the minority is— constitutes at least 25% of the total House membership.

So, it doesn't change those requirements. And then, also, at the same time, it was recommended that we remove chairmen and replace that with chair. So, that's also included in the bill. And if you like, my aide could go through the sectional if you're interested. I think we can probably forego the sectional on this one.

It's a pretty straightforward bill.

We can go ahead and open it up for questions.

I guess the, the first question I have is maybe an obvious one. Do you have, uh, do you have any kind of like legislative historical background on if the intention was to make sure that majority-minority would be heard by saying each of the two major parties, or was it the intention to have a Republic— Republicans and Democrats? In other words, were they trying to effectuate what you're trying to do in this bill, or was the partisan makeup actually the important factor for originally deciding who were members of these two bodies?

To Chair Carrick, Zach Young for the record, staff to Representative Costello. So this— these statutes, when they were written, obviously identified one member from each of the major political parties. You know, when the statutes were written, it was not as common to have independent or undeclared candidates. That has become more popular throughout the years. There are other committees that are statutorily mandated by their membership, specifically the Ethics Committee and the Joint Armed Services Committee, and I believe one, if not both, of those committees identify an actual minority member rather than the members of each political party.

As to the original intention, I have not yet found in research the, uh, whether the intention was to make sure the political parties, um, are represented. I think that in the situation now where coalitions have become such a norm, um, individuals would be better represented as a whole across the state, um, with minority rather than, uh, each political party, because views within political parties can range so vastly. But I would be happy to furnish the committee with any drafting notes that I could find on that original statute and legislation when it was put into statute. I think that would be interesting to look at, just to see what the thought process was behind the original makeup. But generally speaking, I like where this bill is going, since we do have a larger and growing number of independents.

And then just thinking about the decisions that Ledge Counsel makes, as a member of Ledge Counsel myself, and you know, a minority member perspective could be really valuable there, and it's not designated, so to speak. So I think I have a couple of folks in the queue. I have Representative Holland and then Representative McCabe. Great, thanks. Through the chair, your initial question kind of touched on part of my interest, and I think this makes a lot of sense.

I was also curious, though, if you've looked at the history to know, has this— have we ended up having minority members on here as a result of who's been appointed, or has this to date been, because of the way this is currently worded, has it been partisan and we've missed out having minority members participating? And I don't know, it would be interesting, I guess I could go look it up myself, but, you know, does the Legislative Council and the Budget and Audit Committee currently have minority members on it?

At this point in time, or has this prior language caused us to not have this diversity of perspective on these two bodies?

Through the chair, Representative Holland, uh, Zach Young, staff to Representative Costello, for the record. Um, to your question, I believe that currently, uh, on both the Legislative Budget and Audit Committee and the Legislative Council Committee, there is a minority member from the House on each of those committees, but—. Not— well, I don't want to interrupt you, Mr. Young. On Legislative Council, there's not currently a minority House member. There was Representative Prox.

Oh, maybe I'm wrong. I might stand to be corrected there. You know, perhaps there is confusion. I'm looking at the basis page that has Representative Delaney Johnson. —Member?

We do. But I do think there was some shifts that occurred. Yeah, there were. So that could have been part of it. Okay.

Sorry. So to answer your question, I believe that there has been minority members in the past. I don't have a research report or anything, but I would be happy to furnish that for the committee. In this case, the Senate has chosen to go by the political parties, which is in statute, so there is not a minority representative or a minority senator on each of those committees. Although there could have been an option to have, you know, two political parties within one caucus, they did choose to have a minority member on each of those committees.

So as to the long-term history, I'd be happy to give more information to the committee at a later time. That's fine perspective. Thank you for that. Thank you. And thank you for the correction.

I'll go to Representative McCabe. Thanks. I guess my question is, uh, this: 60% of Alaskans are, um, nonpartisan or independent, undeclared. 24% Are Democrat or Republican, and 14% are Democrats. So what happens— and we actually have that situation here in the House, um, where you have 4, um, that are in the majority but they are not Democrats.

Do they— are they now excluded from being on either of these committees because they do not have a party affiliation? I think the answer is yes, actually, legally. I don't know if we've ever done that or not, but the answer is probably yes because it's in statute. So they would be specifically excluded, and I think that is— I think that's a mistake, frankly. So I kind of agree with this.

Yeah, that's a great question. Not that we have to follow the law, but, you know, we don't do it for anything else, we might as well not do it for that. But I don't know. Well, I think, uh, to Representative McCabe's point, I think the, uh, intention— that's why I asked the question about intention for the original crafting. Is it meant to essentially reflect a majority and a minority, as opposed to if the intention originally was to have a specific partisan affiliation.

So I, I kind of would like to know a little bit more about the legislative history on that, to that point as well. I have, I think, Representative Himschute next. I did have a comment. Thank you. Through the chair, I went through a process with CSG West where I attended a board meeting, really didn't know what I was doing.

But their bylaws stated that the chair of CSG West would be from alternating parties, Republican/Democrat. And it took a 3/4 vote, and I barely got it, but I did ask them to change that. And I can't remember exactly the language we used, but I wanted it to be more inclusive. I have zero desire to be the chair of CSG West, but I wanted to know that the opportunity was there for me. So anyway, I like that this bill, I think, is going in that same direction of including folks who aren't— yeah, aren't actively a member of either party.

So I think I like this bill.

Great. Is there additional questions or discussion on House Bill 187 at this time?

Vice Chair Storie. Thank you, Chair Carrick, and through the sponsor, Rep. Costello, I too think that this bill makes sense and I like the new language. So thank you for your work on that, and Senator Rauscher.

Thank you, Representative Costello and Mr. Young, for joining us. We are going to set the bill aside today, and I am going to set an amendment deadline for this bill of also Monday, May 4th at 5 PM. We have a lot of deadlines that are Monday, May 4th at 5 PM right now, so if members are in any way struggling to meet any of these deadlines for early next week, please let me know as soon as possible. Anybody have any amendments for this? We're not going to do a one hearing and done, so Representative McCabe, don't even ask.

You are so methodical.

Thank you again, Representative Costello. Thanks. I tried. You have homework, Andy. Homework is good.

We're going to offer an amendment to add a member of the Irish Parliament. Oh my gosh. She heard that. She heard that. Okay, so that brings us to the final item on our agenda today, which is House Bill 281 from Representative Sadler relating to penny transactions and rounding to the nearest nickel.

This is our first hearing on the bill. Representative Sadler sends his regrets. He is en route back to Anchorage today, and I have told his office that we would be perfectly happy to welcome his staff Melody Wolterdink. So welcome, thank you for joining us, and please feel free to do an introduction for us on House Bill 281.

Thank you, Chair Carrick and members of the committee. For the record, this is Melody Wolterdink, staff to Representative Sadler, and just to reiterate, yes, he does send his regrets that he can't be here, but he's very grateful for the hearing. So House Bill 281 is a penny rounding bill. Back in February of 2025, the White House directed the Department of the Treasury to stop minting pennies, and the reason was that each penny was actually costing almost 4 cents to mint, um, and so it was no longer cost-effective to keep these in circulation. And just last November, the U.S. Mint ran out of their blanks, and so at that point they completed their last regular minting and we no longer have new pennies circulating.

And so we thought the Treasury thought that with over 100 billion pennies in circulation that we would not have such immediate shortages. But that's actually not what we've seen. Probably like $2 bills now that they're— we're not seeing new pennies. People are holding on to them. They don't know if they'll be able to get them again.

They're kind of a specialty item. And so already both consumers and businesses aren't able to make exact change when dealing with cash transactions. And so Representative Sadler introduced House Bill 281 to address the question of rounding. When both businesses and consumers are faced with a cash transaction that doesn't end in a 0 or a 5, so you can't give a nickel back, what do we do to make sure that we have kind of fairness and consistency for both consumers and businesses? And so House Bill 281 would institute what's known as symmetrical is what we call rounding.

And we're all probably familiar with this. This is what we know from grade school where if your transaction ends in a 1 or a 2, you would round down to 0. A 3 or a 4, you would round up to 5. A 6 or a 7, you would round down to 5. And an 8 or a 9, you would round up to 0.

This prevents kind of any issues with say, always rounding up from businesses or always rounding down, or consumers not knowing what to expect when they go shopping. So it's really important to note here that this only applies to cash transactions and only when either the customer or the business doesn't have exact change. Sometimes they still do. So most transactions these days are done credit card, debit card, check, mobile pay, ACH transfer, But for the 10 to 20% transactions that are still done in cash, this would apply. And I'm happy to go through the sectional or answer any questions.

I think just like with our last bill, the sectional is pretty straightforward on this one, so I think we can forgo it. But thank you for offering, um, and thank you for bringing this bill forward. I imagine it's an issue across all states, and I have a general question first, which is just And is this something that the federal government has considered also taking action on to help prevent— because this is— if we address it at a state-by-state level, that seems more onerous than just— since this was federal action, just taking federal action to eliminate these transactions. Thank you, Chair Carrick, and through the Chair, I have not seen any federal action moving forward yet, but I will double-check. We did get.

Idea from NCSL. And it seems like a lot of states are moving forward because I think states will actually take action sooner than the federal government on this. And so we're following kind of general guidelines of what's worked in other states, and particularly when we're thinking about small businesses and their point-of-sale systems and how most of them are the same in every state. And so we want to create some consistency where the federal government has not. Thank you for that.

And I also just imagine that this is really important, especially in small communities where you don't have maybe more cash transactions going on. You don't have any ability to do small change too.

Okay, so I think I was bad at keeping the queue, but I have Representative Himschoot. I think first. Sure. Thank you, Chair Carrick. In elementary classrooms, you'll have the kid who— she stole my answer.

I was very interested in running this bill, so I was glad to see it come forward. The Canadian government spent a lot of time and had a really unified plan when they got rid of the penny. So a lot of what we're looking at has been done, just not at our federal level, but at a different country's federal level. So I really, really appreciate this bill. And I just wanted to add the information that my second largest community of Petersburg, Hammer and Weecon is the locally owned grocery store there and hardware store, great little community grocery store.

And 2 weeks ago there was a letter to the editor in the local newspaper from the manager of that store saying we need to be ready for this and letting consumers know that this issue is coming. And so I was able to write to him and say, hey, there's a bill for that. And, um, yeah, so I, I do want to add to this bill a little graphic that's printable that, um, uh, could be placed at check stands so that— I think the beauty of this bill is that somebody on a cruise ship who has a transaction in Ketchikan will have the same rules around their transaction in Juneau and Skagway, and of course in House District to when this bill passes. So all of that to say, I do have one thing I'd like to add to the bill, but I think it's fabulous that this is before us, and I appreciate your work on it.

I agree, and I would just say to Representative Himschoot as well, I really like the idea of some kind of a graphic, but if we could find a way to craft it so that it's not causing a cost to the state, that would be good. Because—. Chair Carrick, it's a printable graphic, so similar to the alcohol causes cancer bill that I think Representative Gray got through last year. So, and I don't believe that generated a fiscal note. If it, if it includes a fiscal note, I would probably hold back, but if it can improve the bill and the experience of people shopping in Alaska, then I would like to offer it.

Yeah, I would, I would, uh, note this bill currently has a Finance Committee referral, but I'm not quite sure why it would need a Finance Committee referral. So I'm wondering, I'll go to Ms. Wilterdink if you have thoughts there. Yes, thank you, Chair Carrick. I believe we got a Finance Committee for referral because it actually deals with money, not necessarily because it costs money. But if, um, to Representative Himschutz's point through the chair, if you've all been to the IGA recently, they have just an 8.5 by 11, this is how we're rounding sign, and, and I've seen those kind of circulating that I, I do think would be very simple to just print and put up and would cost, you know, the cost of a sheet of paper.

Excellent. I think I have Representative Holland next. Okay, was it Vice Chair Story? Okay, Representative McCabe. So I'm curious, um, what we're going to do with all our pennies, the big 5-gallon jug of water cooler jug of pennies that I have.

So is the state— can we turn them into the state and get nickels for them? They can be traded for gold. They can be traded for gold and silver species. Great. Um, Yeah, I, I don't— was that a rhetorical question?

Sort of. Miss Wilterdingk. Thank you. Through the chair to Representative McCabe, the businesses in your community would love to have those pennies so that they can actually make exact change before they have to start rounding. So if you've got them, I am sure they will take them.

In Anchorage and Eagle River, we've already seen signups. Please, please bring your pennies. We will trade them. Interesting. Um, thank you very much for presenting the bill.

Um, we are going to set House Bill 281 aside, but we will be bringing it back up. And, uh, appreciate you joining us today. Thank you. Okay, um, so that actually concludes our work for House State Affairs today, and, um, we have nothing else on our agenda. So our next hearing is on Tuesday, May 5th, at 3:15.

Um, can you give me that one back? Currently our agenda includes taking action on a few bills. So again, if anybody has trouble getting any amendments you have completed, uh, please let us know right away. But it's my intention we'll take action on House Bill 379 from this committee and my office relating to road service areas, House Bill 218 from the governor's office relating to the Tanana Valley Forest, House Bill— or House Bill 187 relating to ledge council membership from Representative Costello, Senate Bill 237 relating to data sharing from Senator Kawasaki's office. And then we also have hearings scheduled for Senate Bill 163 from Senator Kaufman on repealing inactive fund accounts.

And Senate Bill 239 from Senator Tilton on motor vehicle registration, which is the companion to a bill we've already heard. Um, and with nothing else before the committee, we are adjourned at 4:17 PM.