HFIN-260511-1330

Okay, I'm going to go ahead and call this meeting of the House Finance Committee to order. Let the record reflect that the time is currently 1:42 PM on Monday, May 11th, 2026. And present today, we have Representative Moore Representative Bynum, Representative Kocher-Schraggy, Representative Jimmy, Representative Galvin, Representative Tomaszewski, Representative Hannon, Representative Stapp, myself, Co-Chair Foster. And just a reminder, folks can mute their cell phones. And before we start, we have a number of items on the agenda today.

We're— originally it was announced that we would be back on the floor by 3. I think there is some thinking about possibly possibly pushing that back. We're not sure at this point, so we're going to keep an eye out on when we're due back on the floor. It's possible that it gets pushed back to 4:00, 4:30, but as it stands right now, we know it's, uh, 3:00 for sure. So we do have 4 items, I believe, before us, or maybe 3.

We've got 4 items before us. Um, the order in which we're going to take these is Senate Bill 24, Tobacco and E-cigarette Tax Bill, and then the Bulk Fuel Loan Bill, which is House Bill 388. And then after that, Senate Bill 29, Big Game Commercial Services Board. And then after that, House Bill 381, Oil and Gas Property Tax Bill. I know that the oil and gas— the gas line bill is one that a lot of eyes are on, and I think they are scheduled each day at 1:30 at the end of whatever other bills are up that day.

But we're going to try to push those gas line hearings up the order a little bit each day. So just give folks a heads up. I know that's a little bit of a priority. And so we're going to be trying to speed things up a little bit on that one. And so with that, let's see, with regard to SB 24.

I think we're moving things around on my schedule a little bit, so I just gotta get us situated here. If I could invite up Senator Stevens or his staff, Mr. Tim Lampkin, if you could please come up and put yourself on the record and just give us a brief recap of the bill, and then we'll go right into public testimony and Thanks for joining us. Good afternoon, Mr. Co-chairman, members of the committee. For the record, Tim Lampkin, staff to Senator Stevens. Before you is the latest rendition of some legislation that is intended to curb youth initiation, access, and addiction to nicotine vis-à-vis in the form of vaping products.

It's a bill that's been before you for some time in the past. I'm happy to go into a summary, or we can go right into public testimony at your pleasure. If you could just give us the high points just real quick, and that'll be good enough. So the— I suppose the core of the bill would bring the state in alignment with our T21 policies. That is to say, to raise the age, the legal age to buy, sell, purchase tobacco and nicotine products from age 19 to 21.

This would align with federal law. That in and of itself, in a sentence, is what this bill would do. Great. Thank you very much. So with that, I'll go ahead and open up public testimony on Senate Bill 24, tobacco e-cigarette tax bill.

And if folks would like to submit written testimony, they can do so by emailing us at [email protected]. And we've got a pretty packed schedule today, so if maybe testifiers could keep their public testimony to 2 minutes if possible. And looks like we've got a number of people online. It might be— I'm just guessing— maybe around 10. I know some of these folks are with the different state— with the departments within the state here, so maybe not that many.

But we're gonna jump right into— let's see, is there anyone in the room here who wanted to testify.

I don't think so, but I just want to double-check. I don't see anybody in the room, so with that, I'm going to jump right in to Mr. Mark Sundquist. I think maybe some of these names might be mixed up in terms of which bill folks are here for. Are you here for the tobacco bill and e-cigarette bill, Mr. Sundquist? Looks like you're with Chevron.

Yes, I am.

Okay, you're with Chevron, but you're not here to testify on the cigarette bill, are you?

I'm here to testify on the tobacco. Oh, great. Oh, perfect. Okay. Well, thanks for joining us.

And if you could just state your name and your affiliation and proceed with your 2-minute testimony.

Okay. Chair Foster, Chair Mr. Josephson, Chair Schwagge, members of the committee, my name is Mark Sundquist. I'm the owner of Hillside and Southside Chevron stores in Anchorage, which includes one location in Representative Schwagge's district. I have been a convenience store owner for more than 12 years, and I care deeply about my employees, their families, and the communities we serve. I appreciate the opportunity to speak with you today in opposition to SB 24 as it's currently written.

I strongly support the legal age for purchasing tobacco and nicotine products in Alaska from 19 to 21. This change is overdue, especially since responsible retailers such as ourselves have already complied with the federal age 21 requirement for since it's been in place since 2019. My concern lies with the proposed 25% retail price tax on vapor products. Price-based taxes distort the market and disproportionately harm compliant small businesses. Collecting taxes at the retail level also increases the risk of underreporting and misreporting.

Which can limit state revenue and complicate state enforcement. More importantly, a retail price tax rewards ultra-cheap illicit disposable products that already dominate the market. These products often contain large volumes of e-liquids, evade regulation, and avoid taxes, making them more attractive to consumers will put irresponsible retailers such as ourselves at a competitive disadvantage. A Lowe's-specific per-milliliter tax captured at wholesale rather than at the retail level would be fair, easier to administer, and would not encourage illegal sales. The illicit vapor market is already thriving in Alaska and nationwide.

A practical step the state could take is to establish a clear, publicly accessible directory of products that are federally authorized and allowed for sale in Alaska. This would provide needed clarity, support, enforcement, and help ensure that only legal, compliant products are sold. I respectfully urge the committee to amend SB 24 to raise the legal age to 21 and replace the retail price tax with a per-milliliter wholesale tax while taking steps to strengthen the legal regulated market rather than unintentionally boosting the illicit one. Thank you for your time and consideration. Great, thank you very much, Mr. Sundquist.

Representative Hannon has a question. Thank you. Mr. Sundquist, do you sell other tobacco products at your store besides vape or electronic products?

For what other type of products? Other tobacco products.

Uh, yes. Follow-up. Follow-up. And are you, uh, do you have any problem complying with the taxes on chew, snuff, cigarettes, and cigars as it currently is in statute as an excise tax?

No, but in this case, this, this product, if you, if you decide to do it on a retail space, it would be the only product in my store that I would tax in the store. Everything else comes from the wholesaler pre-tax. The advantage to the state would be that if you tax it at the wholesaler, you'll always get your taxes. Yep. Thank you.

Representative Ballard. Thank you. Thank you for being here today. So do you sell other products in the store that are less safe than the ones that are looking at being taxed at a higher rate currently?

I'm not following what you're asking. I'm sorry.

We sell other tobacco products, but All of them are— as far as vaping products, are you talking about? I'm just trying to find out if you sell products that are less safe as far as tobacco products than what this— the vapers— the vapes are. And the reason I'm asking, maybe that will help you, is do you think that this could be disincentivizing individuals from buying these products because there's a higher tax versus unsafe products where it's going to be lower.

That is a possibility, but that's not the point. The point is how it's being taxed. I don't know of anybody that's arguing with the percentages. It's how it's being taxed and how it's being collected and how— as far as, as The problem is, is there's people that are buying online where you're not seeing any taxes. May I just—.

Representative Ballard, we're buying through legitimate distributor distribution.

May I, Representative Ballard? I'm looking at something that U.S. Senator Dan Sullivan had stated. He said if taxes are raised on these products, that he worries it could exacerbate smoking issues by disincentivizing the use of these safer products. So I'm wondering if you have products in your store that are more harmful to individuals, tobacco products, than these safer products that could disincentivize individuals from buying the safer products and now will buy the more harmful products because they're less expensive.

Oh, okay. In that sense, yes. Do we carry other products? I mean, we carry cigarettes and we carry Yeah, thank you. Okay, and just so folks online know, uh, how long the wait might be, we do have 11 other testifiers.

So with that, the next person is Valeria Delgado calling from Anchorage, and then after that, um, Lauren Simpson Gomez, and then after is Levi Gilbert. So with that, Ms. Delgado, if you can put yourself on the record.

Okay, thank you. Good afternoon, Finance Committee. My name is Valeria Delgado. I'm from Anchorage and I work in tobacco prevention. I'm here today to urge you to support taxation of e-cigarettes and vaping products.

In my work, I regularly see the real impact these products are having in our communities, especially amongst young people. I've spoken with young adults who started vaping as teenagers often without knowing fully and fully understanding how much nicotine these products contained. What began as an experiment quickly became an addiction. Many now tell me that they struggle to quit and wish they had known the risk earlier. I also hear directly from schools across all grade levels about the growing challenges they are facing with vaping.

Educators and staff describe e-cigarettes becoming part of everyday life for students. Instead of focusing on learning, schools are dealing with nicotine addiction. This is not an isolate— isolated to one age group or one community. It is widespread and growing. We know that the price and accessibility matters.

Taxation is one of the most effective tools we have to reduce youth use and prevent lifelong addiction. By increasing the cost of this product, we can help discourage youth from starting reduce access, and protect the next generation from becoming dependent on nicotine. Again, thank you so much for listening, and I hope that you support SB 24. Great, thank you very much. Thank you.

Representative Galvin. Uh, thank you, Co-Chair Foster. Just very briefly, I wanted to say thank you to, uh, Ms. Delgado for all of your work over the years. I've appreciated your visits and the many ways that you are helping to educate our children to understand the differences between these different products. I know that it's been a frustration for you since to you it's so clear.

And I just want to acknowledge that your work is very much received and appreciated.

Thank you so much. Thank you, Ms. Delgado, for calling in. Next up, we have Lauren Simpson Gomez calling in from Honolulu. If you could please state your name and your affiliation.

Hi, yes, uh, Co-chair Foster and members of the committee, can you hear me okay? Uh, yes, we can.

Yes.

Good afternoon, Co-Chair Foster and members of the committee. My name is Lauren Simpson Gomez, Government Relations Director for Alaska and Hawai'i for the American Heart Association. Thank you for the opportunity to provide comments today. Tobacco use remains the leading cause of preventable death in the United States, with tobacco causing more than 480,000 deaths each year. And the American Heart Association recognizes it as a major driver for cardiovascular disease and premature mortality.

Evidence-based policies are critical to reducing this burden. Raising the minimum sales age to 21 has been proven to reduce youth smoking and limit access among young people. Research shows that lower smoking rates among 18- to 20-year-olds in jurisdictions with these laws. Increasing taxes on all tobacco products, including e-cigarettes, cigarettes, and cigars, is also one of the most effective strategies available. Tobacco tax increases significantly reduce use, particularly among youth, and are a proven tool to drive cessation.

Uh, finally, youth-focused enforcement should prioritize prevention over punishment. Uh, federal and public health guidance emphasizes holding retailers accountable for illegal sales rather than penalizing underage users. This approach is more effective at reducing youth initiation and supporting long-term health. Taken together, these policies work. Comprehensive approaches combining taxes, smoke-free laws and age restrictions lead to measurable reductions in tobacco use and improve population health outcomes.

For these reasons, we strongly urge consideration for comprehensive tobacco control policies that protect public health, reduce disparities, and save lives. Thank you for the opportunity to provide comment today. Great, thank you very much, uh, Mr. Simpson Gomez. I don't see any questions, so appreciate your calling in. Next up Levi Gilbert calling from Kotzebue, if you can put yourself on the record.

Good afternoon, can you hear me? Yes, we can. Yes, good afternoon. Thank you so much for your time. My name is Levi Gilbert.

I am calling from Kotzebue, Alaska. I am a native enrolled tribal member here in the community of Kotzebue. I would just like to simply show my support for Senate Bill 24 because I'm concerned about youth and vaping. Thank you. Great.

Thank you very much. I don't see any questions. So next we'll go over to Alex McDonald calling in from Fairbanks. If you can put yourself on the record.

Yeah. Hello, members. Alex McDonald calling from Fairbanks, Alaska, and I'm calling to oppose this bill. It's got outdated slides, outdated survey numbers. The most recent youth tobacco survey has combined youth high school and middle school rates for past 30 days at 5.9%, of which only a quarter of those were daily users.

This is being handled— sorry, my allergies are getting me. This is being handled at a federal level and the survey numbers show it's working. Um, just the last week, the FDA put out an approval for two fruit flavors from Glass in a first, and they also released a statement stating that products awaiting approval would not be subject to enforcement and can remain on the market. Uh, during the last hearing on this, uh, someone testified that they're finding THC vapes in schools and they reported that youth that vape have memory problems and problems functioning. That sounds like someone's getting stoned, not using nicotine.

I'd like to see facts and figures on what is actually being confiscated because we haven't heard anything on that. And if they're just lumping a vape with a vape, that's going to be an issue. In San Antonio, they looked at the issue and found that two-thirds of confiscated vapes were not nicotine, they were THC. And there's no recreational use in Texas. So that could be, uh, the issue where this bill's missing the mark.

The federal, uh, experts are tackling this issue and doing great work. I feel that this bill could derail their efforts and send people back to smoking cigarettes. And as a former smoker, I don't want to do that.

Okay, thank you very much, Mr. McDonald, for your testimony. I don't see any questions. Next, we're going to go over to Rosa Kim calling in from Anchorage. If you can put yourself on the record.

Hi, my name is Rosa Kim. I'm calling from Anchorage. I'm the senior human resources business partner at Charlie's Produce. A few months ago, I sat down with a young employee who was really early in his career. He's super hardworking.

During our conversation, he shared that he had been struggling with nicotine use for years, and it's something that started well before he ever entered the workplace when he was still in middle school. What struck me the most was not just the habit, but how early it began and how difficult it's been for him to break this. In my role, I see stories like this more and more often than people realize, and that's why Senate Bill 24 matters so much. This bill raises the age to access tobacco and nicotine products to 21 and strengthens regulation and education around these products. But more importantly, it creates a critical opportunity for prevention—stopping addiction before it starts—at a stage when young people are most vulnerable.

We see in HR the long-term effects when prevention doesn't happen: higher health increased absenteeism, people facing challenges that can follow them for years. Um, and in reality, most nicotine use begins before the age of 21, and hopefully this bill will help to close that gap. Um, and another important piece to this conversation is the additional revenue generated through taxation on electronic smoking products. That revenue has the potential to support education prevention programs and cessation resources. It gives us a way to reinvest directly back into our communities to support young people before addiction takes hold and to help those who are already struggling find a path forward.

So for me, this is more than a policy. It's about giving our youth a better starting point. And so that's why I think it's— passing this bill is super important.

Okay, thank you very much, Ms. Kim. I don't see any questions, so we'll go over to the next testifier, Carrie Neeson, calling in from Vancouver. If you can put yourself on the record.

Good afternoon, members of the Finance Committee. My name is Carrie Neeson, and I represent the American Lung Association in Alaska. Far too often, nicotine addiction begins in adolescence. Flavored tobacco products and electronic smoking devices continue to attract and addict young people at alarming rates. One of the strongest aspects of SB 24 is its use of a percentage-of-price tax structure rather than a volume-based tax.

A percentage-based tax is more effective because it adjusts as product prices change and applies more consistently across the wide range of tobacco products currently on the market. This approach also reduces opportunities for manufacturers to manipulate product size, nicotine concentration, or formulation to minimize their tax burden. Research consistently shows that increasing the price of tobacco products is one of the most effective strategies for preventing youth tobacco use. Young people are especially Alaskans are price sensitive. When prices rise, fewer youth begin using tobacco products, and those who already use them are more likely to reduce consumption or quit altogether.

In addition to strengthening Alaska's tobacco tax framework, SB 24 improves compliance and enforcement by raising the legal age to purchase tobacco products to 21, helping further protect young Alaskans from lifelong nicotine addiction. Every reduction in youth tobacco use represents lives saved, healthier lungs, stronger communities, and lower long-term health care costs. The American Lung Association urges the committee to support SB 24 and advance this important legislation. Thank you. Thank you very much, Ms. Neeson.

I don't see any questions. Looks like we picked up a few more people, so it looks like there's about 10 people in line here. And so the next person is Becky Zaveral calling in from Fairbanks. If you can state your name and your affiliation. [FOREIGN LANGUAGE] Hi, thank you.

Yes, my name is Becky Zaveral, calling from Fairbanks. I'm speaking today as an individual. I am a principal in the elementary school here in Fairbanks, and just talking to my colleagues also in the middle school area, vaping is starting earlier and earlier. In the elementary setting, I have confiscated and suspended students for vaping as young as 4th and 5th grade. My colleague in the middle school area of about 400— they have about 450 kids— she deals with a lot.

She's their behavior specialist, and she deals with kids who are vaping. She estimates about 50 kids vape in that school, and there's about 35 that are fully addicted to vaping. So although she's working with them, addiction doesn't go away with that intervention at school. So they are having to sneak out, mask it, All of our middle schools and high schools have vaping sensors in the bathrooms, and people have to be— bathrooms are shut down so that there's an adult looking in the bathroom and available to it. It's just become such a consuming part of our middle schools, high schools, and starting to in our elementary.

So I urge passing Senate Bill 24 and trying to help us get a little bit more regulation for these kids are not starting the vaping so soon. Thank you. Great, thank you very much. And I don't see any questions, so next we'll go to Jessica Frey calling in from Anchorage. If you can put yourself on the record.

Hi, my name is Jessica Frey. I am a mom of 3 living in the Turnagain area. I am calling in to support SB 24. Science show, studies show Math does— if you tax it, they are less likely to buy. Moving, um, moving the age up to meet the federal standard is so important for Alaskans.

I've seen firsthand so many kids starting and never being able to quit. So I am going to very much support SB 24. Great, thank you. Thank you for calling in. Uh, next up we have Stephen Brown calling in from Kenai.

If you can put yourself on the record.

Hello, my name is Stephen Brown. I am calling from Kenai, Alaska to urge members to vote no on the current form of SB 24 because vaping is a harm reduction device that helps many Alaskans kick the harmful nicotine products and choose a healthier option. It could cause people that currently use vaping products to stop for for a much less costing cigarette, which is a much more harmful product. I urge you to please think about how many lives this will save if we help people stop smoking cigarettes. Think about your fellow Alaskans trying to live a healthier lifestyle and vote no on the current form of SB 24.

Thank you. Great, thank you very much, Mr. Brown. And, uh, next up we have Aaron Osterback calling in from Anchorage. If you can state your name and your affiliation. Hi there, thank you, uh, Co-Chairs Foster, Josephson, and, uh, Schrage.

This is Aaron Osterback with, uh, in Anchorage, Alaska calling as a community member, and I am for SB 24. I'm a father of 3. I've had a daughter who picked up the habit, uh, the last year of her high school, and she struggled with, uh, with that, was able to quit, um, [Speaker:JAMES] I do oppose what was just said, that e-cigarettes and vapes are a safer device. Anything that's not oxygen shouldn't be going into your lungs. And I just wanted to provide some information.

I also work in the prevention field, and e-cigarettes and vapes are the second leading cause of suspensions in our school district. Presently, as of March this year, those numbers in a 5-year span led up to 1,179 total suspensions in our school district, and that's an average of 235 students that are being suspended just for e-cigarettes and vapes. This means that our school district is being impacted in, in terms of being able to support kids because our suspension policy means that they have to leave school anywhere from 5 to 10 days. That's 1,175 to 2,350 school days that are missed because of the suspension policy. But getting back to the reason why is because kids are are gaining access to e-cigarettes and vapes.

So strongly encourage the, uh, this bill to go through. Along with the taxes, I feel like they would support long-term education and upstream prevention with their schools, with our community and our youth. They are our future, and I think we need to take that into consideration. Thank you for your time. Great, thank you for calling in.

Uh, next up we have Jennifer, uh, Chikiak calling in from Anchorage. If you can put yourself on the record.

Good afternoon, my name is Jennifer Chukwuyek. I live in Eagle River and I'm calling in support of SB 24. As a career public health professional, I've heard about the impact that these products are having on our youth all across the state, from trading for chocolate milk to backing up pipes in Cocteau because they're being flushed down the toilet. Um, I cannot stress enough how the impact that these products have had on our youth and on their families. A tax impacts youth spending habits and is the best way that we can, uh, impact this growing problem.

Please pass this bill today. Thank you for your time. Great, and thank you for your testimony. Next up, we have David Dormeyer calling in from Sterling.

Mr. Dormeyer, are you there? Hi, my name is David Dormeyer, and I'm calling from Sterling, Alaska. I just wanted to vote no on Senate Bill 24. I've been a smoker since I was 15 years old. My parents smoked for the last 40 years, you know, grab a cigarette, bop it out of the ashtray, you know.

Since I started vaping, I have completely quit smoking. My parents of 40 years, they both started vaping, they both quit smoking. And so I just want to say no against Senate Bill 24. Thank you very much for calling in, Mr. Dormeyer. And next up we have Lena Edias calling in from Anchorage.

If you can state your name and your affiliation.

Hi everyone, my name is Lena. I am a student at UAA and I have grown up and lived in Alaska my whole life. I am calling in support of SB 24 because I have personally seen how many young people are addicted to e-cigarettes and vaping products and how a lot of them started so young and are currently unable to quit even though they really want to.

A lot of them don't understand how addictive these substances are until they're already affected by them. Working in tobacco prevention for the past couple years here in Alaska, like when presenting in elementary schools, [FOREIGN LANGUAGE] Every single student in all of the grades know what e-cigarettes are, and they see them in their schools. That alone just shows how widespread these products are and how accessible they are to young people. Adding a tax and raising the minimum age to purchase these products will help create more of a barrier for young people to reduce and reduce youth access to them. These products are often marketed towards young people.

So I truly believe that SB 24 is a really important step in preventing more young people from becoming addicted to nicotine products. Thank you for your time. Great, thank you, Lena. And is your last name Eadus? Is that— am I saying that right?

Uh, Eadus. Oh, great. Okay, thank you. Okay, seeing no questions. Thank you.

Thank you. Next up we have Tabitha Karpow and then Cindy Emery, and that should be the last two of our testifiers. Looks like you're calling in from Anchorage, Tabitha.

Hello, thank you, Co-chair Foster and Shaughi and the rest of the Finance Committee for hearing us today. My name is Tabitha Carpo and I am a mom to 4 teenagers. I have one that's graduated, one that is graduating from Colony, one that is a freshman at East, and one that is a junior at Benny Benson. And all of them have been exposed to e-cigarettes, and two of them have tried them. I've navigated this as a parent, um, and it's just amazingly shocking how prolific it is within the schools and accessible.

So I am in full support of SB 24, of both raising the age as well as the taxes, um, so that we have taxes that are going back to cessation and educational opportunities for students who we know that most, um, smokers and vape users are getting addicted to it at a very young age. So thank you for your time today and please support SB 24. Great, thank you, Ms. Carpo. Uh, lastly, we have Cindy Emery calling in from Anchorage. If you can put yourself on the record.

Hi, my name is Cindy Emery and I am a mom, grandma, and great-grandma in Anchorage. And I'm calling in support of SB 24. Two of my grandchildren, one at Wendler and one at Beggich, have already had to navigate the difficult circumstances of being exposed to their peers using vapes at school. It's upsetting, it's scary, it's—. And it's absolutely The school environments are drowning in this element.

We need to do everything we can to make this unattractive, make it inaccessible, adding the taxes to price them out of being able to buy.

This stuff. It's clear that the industry is doing everything they can to make it attractive to them, putting fun fruit punch flavors and all of that kind of stuff. We need to step in. It is long overdue. We need to tax this.

We need to raise the age. We need to help our kids either get away from it and stay away from it. End of story. And I fully support this bill. Thank you.

Thank you very much, Ms. Emery. And I don't see any questions. Is there anyone else in the room who would like to testify? Seeing none. Anyone online who would like to testify?

Seeing none, I'm going to go ahead and close public testimony on HSB 24. And if folks would like to submit written testimony, they can do so by emailing us at [email protected]. @Akleg.gov. And so with that, we do have a number of fiscal notes that we'll walk through and then we'll move to the next bill. I believe there are 8 in total.

And so the first fiscal note is from the Tax Division, Mr. Brandon Spanos. If you can put yourself on the record. Also, if folks can cite the control code at the bottom right of their fiscal note just to ensure that we have the most current and up-to-date fiscal note. Mr. Spanos.

Yes, for the record, Brandon Spanos, Acting Director with the Tax Division in the Department of Revenue. The control code on my fiscal note is QHKOO, and this fiscal note is indeterminate, but we did provide a range of possibilities for revenue. That's on page 2 of the fiscal note. And after full implementation, I should also mention this fiscal note assumes that the effective date will be pushed out a year since the bill was introduced last year with the effective date of 2027 for the tax. We assume that that will become January 2028.

And so the full, the first full fiscal year of implementation would be FY '29 in that case. And the range of possible revenues is $2.7 to $6.1 million.

And the reason for that broad range is just the uncertainty. We don't have specific sales data, retail sales data for e-cigarettes in Alaska. So we took national data that was available to us and extrapolated that into our population. And came up with that range. The cost to implement, there would be a cost because this would be a new tax type.

As was mentioned during one of the testimonies, it would be our only tobacco-type product done at the retail level, so we would need two new staff, one tax technician, which would deal with the licensing and processing of tax returns, and then an auditor to answer questions from the taxpayers as well as do audits for compliance. We would also need a one-time capital cost of $250,000 to build a new module for the tax type in our Revenue Online system and our tax revenue management system. So Revenue Online is for the taxpayers to access their tax returns online, file and pay and communicate with the tax division. And the other tax revenue management system is our internal system. Okay.

Do we have any questions of the committee? Seeing Representative Hannon. Thank you, Co-Chair Foster. Mr. Spanos, I'm looking at page 2 of your fiscal note and the revenue data. So in the high case scenario, Matsuburo data extrapolated to Alaska.

So I'm just curious, you're using the Matsu borough's current tobacco tax rate revenue and then extrapolating it to this new tax that shows in FY '29 $6.1 million in revenue potentially?

Through the chair, Representative Hannan, thank you for that question. I misspoke earlier. There is— yes, we did use some local data. For the, for Matsu, which does have a tax on e-cigarettes, to get to that high case, correct? Thank you.

Okay, seeing no further questions, the next fiscal note before us is from the Public Defenders. Ms. Ariel Toft, if you could put yourself on the record.

Good afternoon, my name is Ariel Toft. I'm calling from Anchorage, and I'm a deputy public defender with the Alaska Public Defender Agency. As you can see, the control code for our fiscal note is AYGFK. Um, although this bill does expand the definition, um, of the conduct for which one could be charged with a Class A misdemeanor, we do not, uh, anticipate a significant fiscal impact, uh, on our agency from this bill. Um, our research indicates that the vast majority of sales of these products are done by businesses rather than individuals.

Our agency is not typically appointed to represent businesses or business organizations, only individuals, so we don't anticipate much of a fiscal impact. Okay, and we have a control code of REU. Uh, let's see. Oh wait, no, that's, uh, let's see, you're Public Defenders, so it should be— did you— can you repeat the fiscal note that you had?

The control code on the note that I have is AYGFK.

And I've got— ours is dated May 5, 2026, with a control code of XCHBO. Ours is a zero fiscal note, so I'm guessing it's— you said it's not much of a fiscal note on your end. I'm guessing it's zero. Ours is also a zero fiscal note. Um, I, I apologize, uh, for any confusion.

It's possible I, I was sent, uh, an older outdated, uh, note, but I do know that we've submitted a zero fiscal note most recently. We don't anticipate, uh, a fiscal impact from this bill. Okay, I'll have my staff just double-check to make sure that the analysis isn't substantially different, but it sounds like we're probably okay, so Do we have any questions for Ms. Toft? Seeing none, we're going to go to the— thank you very much for that presentation of that fiscal note. We're going to go to the next one, which is Office of Public Advocacy.

If I could have my staff, Mr. Brody Anderson, come up and walk us through that one.

Thank you, Mr. Chairman. For the record, Brody Anderson, staff to Representative Foster. Before the committee today— excuse me— is the fiscal note from the Department of Administration. The appropriation is legal advocacy services. The allocation is OPA, Office of Public Advocacy.

The OMB component number is 43. The control code is REUMI. This is also a zero fiscal note that has been submitted before the members. The department reflects that though there is the classification of a Class A misdemeanor, they do not assume that there will be noticeable caseload increases. So they are projecting a zero fiscal note for this bill.

Okay. Seeing no questions, thank you, Mr. Anderson. And our next one is from Ms. Sylvan Robb. I believe you are in the audience here. If you can walk us through Commerce's fiscal notes.

Thank you, Mr. Chair. For the record, Sylvan Ropp, Director of the Division of Corporations, Business and Professional Licensing. This is the fiscal note for OMB component number 2360. The control code is ULGYC.

And we do not impact— excuse me, anticipate any impact on the division's operations as a result of legislation, so we have a zero fiscal note. Okay, do we have any questions? Seeing none, easy. Thanks for being here. Okay, next up we have Heather Rogers, Public Health.

Ms. Rogers, if you can put yourself on the record.

Good afternoon. For the record, Heather Rogers, Administrative Operations Manager for the Division of Public Health in Department of Health. And, uh, the impact to the Department of Health would be the change of tax structure, but we don't really anticipate that there'll be any fiscal impact. So this is a zero fiscal note, and our control code is GDCBZ. Okay, I don't see any questions.

Thank you very much, Ms. Rogers, for calling in. Next up, we have Catherine Fritz for criminal— the criminal division. If you can put yourself on the record.

Thank you, co-chair. This is— thank you, co-chair. This is Catherine Fritz.

First budget analyst for the Department of Law. Um, our control code is DELAK, and for this legislation, the Department of Law has submitted a zero fiscal note. We do not anticipate any fiscal impact from this legislation. Okay, seeing no questions, uh, I think we're on our last— second to the last Fiscal notes. Thank you, Miss Fritz.

And Diana Thornton, State Troopers.

Good afternoon, Chair Foster. This is Diana Thornton, Administrative Services Director with the Department of Public Safety. I'm calling in on fiscal notes control code VEF SU for appropriation Alaska State Troopers, the OMB component 2325.

So this bill does add to the Class A misdemeanor crimes for shipping tobacco products. However, the department does not anticipate a fiscal impact and is therefore submitting a zero fiscal note. Okay. Representative Stepp. Yeah, thank you, Chair Foster.

Through the Chair, how does the department not anticipate any fiscal impact whatsoever unless you're anticipating willful noncompliance? Through the Chair. Ms. Thornton.

Through the Chair to Representative Stepp, the department anticipates that the resources that we have currently can continue to provide enforcement on this misdemeanor crime, we don't anticipate a fiscal impact for an additional add to the statutes for this crime. Okay, thank you. Okay, seeing no further questions, thank you very much, Ms. Thornton. And the last fiscal note is Nancy Mead. Ms. Mead, if you can put yourself on the record.

Thank you, Mr. Chairman. For the record, Nancy Mead, General Counsel for the Alaska Court System. The judiciary submitted a zero fiscal note. The control code is small g capital G G D W. This bill would impact our operations, specifically the changes in Section 3 and 4 that would impose a fine for violators who possess tobacco vape products or anything containing nicotine of $300. And Section 4 says that the Supreme Court shall establish establish a bail schedule so that those 18, 19, and 20 can mail in those, um, the fine amounts.

But subsection E, page 3, lines 25 and on, those younger than 18 would need to come to court to satisfy, um, uh, to address the citations that they received should they get a fine for this offense. But still, we don't anticipate these numbers will be substantial enough that it would call the cause an actual fiscal impact, just a slight workload increase. Questions for Ms. Mead? Representative Stapp. I think— [SPEAKING IN FOREIGN LANGUAGE] —to Ms.

Mead. So your impression is that the court is currently resourced sufficiently to be able to handle all of its caseload, even though this legislation would potentially add more caseload to the chair? Through the chair to Representative Stapp, the legislation on page 3, lines 22 through 25, says that for these additional age groups, 18, 19, or 20, They'll go on a bail schedule, meaning they simply mail in their ticket like a speeding ticket. That does not cause substantial workload to the court system. Creating the bail schedule would take me maybe 2 hours to do.

So that is not a fiscal impact. And already those under 19 who receive a ticket for this have to come to court, so they would just continue to come to court. So I would not expect a fiscal impact. No fault, Mr. Kocher.

Representative Stab. Yep. Thank you, Mr. Voster. Through the chair to Ms. Mead, wouldn't they have the ability to dispute the fine in court like you would a speeding ticket?

Through the chair. Through the chair, Director Stapp, they certainly would be able to do that. The numbers of people who have received citations for these in the past have been, uh, quite low. Uh, even if we had, for example, you know, 500 more citations issued, which I would not expect at all, most either mail in their fine, or actually about half get defaulted, and a small number, if other violations would be any instruction, uh, do come to court. But that is something that would fluctuate naturally with the ups and downs of the issued speeding tickets too, and we wouldn't be able to hire somebody to handle it, for example.

Okay, thank you. Okay, seeing no further questions, thank you very much, Ms. Mead. And so, uh, before I set an amendment deadline, I want to check with the committee to see if you have any questions for the bill sponsor. I don't see any questions, so I'm going to go ahead and set an amendment deadline for SB 24. That is the tobacco and e-cigarettes, uh, bill, and set that amendment deadline for this Thursday, May 14th, at 5 PM.

So if you can submit those to Ms. Helen Phillips or my staff, Mr. Brody Anderson. Uh, I'm going to jump right into the next one. I think it might be relatively short, um, and then, uh, and then we'll figure out what we're doing with the next bill, which is the bulk fuel. Ripton, you have a question? Yes, thank you, Co-Chair Foster.

Can you say that again, the time? Thursday at what time? Sure, Thursday, May 14th at 5 PM. Thank you. And so the next bill we have before us may go fairly quickly.

It's Senate Bill 29, Big Game Commercial Services Board. I believe we've got public testimony testimony and then one fiscal note. And, and then we'll set an amendment deadline for that one also. So we'll jump right into that. I'd like to invite up Senator Bjorkman if he's here.

I don't see him here, but I do see his staff, Ms. Sylvia Bieber. And if you can just give us a very brief recap of what this bill does, and then we'll go into public testimony and the fiscal Ms. Bieber. Thank you, Mr. Co-chair and members of the House Finance Committee. For the record, my name is Sylvia Bieber, staff to Senator Bjorkman.

Senator Bjorkman sends apologies for being unable to make it today. He's chairing the Senate Labor and Commerce Committee right now. The Big Game Commercial Services Board is comprised of 9 members who serve staggered 4-year terms. A dedicated staff member that knows the business of guiding in the state will improve efficiency of the board. The board handles hunting guide licensing functions, administering board meetings, maintaining and writing 29 guide examinations, including the registered guide outfitter written and practical exams and an exam for each game management unit.

They generate reports and assist the Department of Commerce, Community and Economic Development Investigative Services and the Department of Public Safety and Game Investigation. Senate Bill 29 codifies this executive administrator and its range and statute. This position has been a temporary increment since FY24 and was filled in October of 2024. This is currently and will continue to be paid for by designated general funds that come from guide licensing fees. Okay, thank you very much.

And, um, I'm going to jump right into public testimony and then we'll go to questions. So with that, I'm going to open public testimony on SB 29. And if there is anyone who would like to submit written testimony, they can do so by emailing us at [email protected]. Is there anyone in the room who would like to testify? Is there anyone online who would like to testify?

I know that we did have 6 invited testifiers, so we've had a decent amount of public testimony from other testifiers. So with that, I'm going to go ahead and close public testimony on SB 29, Big Game Commercial Services Board, and we'll go to questions. Representative Allard. Thank you. Thank you for being here today through the co-chair.

So I'm a little bit concerned about putting the position into statute. It gives it— I feel it gives less public accountability. So right now it's not in statute, this particular position. And I cannot wrap my head around putting it into statute. Can you kind of explain the need for it to go into statute?

Ms. Beeper. Through the chair— Convincingly. What's that? Convincingly. Through the chair, Representative Allard, I think out of the 21 boards, 6 have an executive administrator position and 3 of those are codified in statute with their statute ranges.

I think the best reason is for it not to be a temporary position in the budget anymore, just to make it a full-time thing so that it is not at risk.

Yeah, that is it. Okay. So thank you through the co-chair. So my concern about that is that there is not going to be as much public accountability. But it seems to me that we, we're constantly growing our government in positions like this.

This is a board, and the ability to take that position away if it doesn't need to be there is something that we as a body should be able to do. But once it goes into statute like this,.

It's going to be there probably till the end of time. So I will stop there and I'll just bring an amendment forward. Thank you. Further questions? Representative Tomaszewski.

Yeah, thank you, Co-Chair Foster. So this bill, the position would be paid for directly by the receipts from the— from those on the board. Is that correct? Through the chair to Representative Tomaszewski? Yes.

Thank you. Okay. Representative Bynum. Thank you, Co-Chair Foster. Through the chair, thank you for being here today.

Along the lines of what Representative Allard was saying, was talking about this position being in statute, is the position in statute coincide with the sunset that would be associated with the board? And then secondly, when the board is being audited and reviewed, is the practicality or the effectiveness of those positions, is that part of the evaluation? Through the chair to Representative Bynum. To the second part of your question, I believe so, but we do have Director Sylvan Ropp here who may be able to answer that better. Could you repeat the first part of your question?

The first part— through the chair— the first part of the question was revolving around the position being tied to the board and the board being tied to a sunset date. Through the chair. So do you mean it? Would the position like go away if the— like the next sunset we would have to do it again kind of thing? Correct.

I don't believe so, no. So as a follow-up, Representative Bynum. So if we had the board sunset and actually go away, what would the effective purpose of the position be? If through the chair to Representative Bynum, if the board were to sunset, yes, it would go away. But in the sunset audit, that— I don't— it would go away if the— yeah, sorry.

Yes, thank you. Okay. I don't— Representative Ballard. Thank you. Thank you.

And through the co-chair, so the other issue that I kind of have here is that the authority that's established in the qualifications of duties, that sounds like it's something that the board would designate. And then it takes basically what the legislature would be doing— legislature would be doing is just offering a blank check. There's no guardrails on that. Do you have a comment on just the board overseeing everything and then the legislature has no guardrails on what the qualifications are? It's taken away completely from the legislature.

Ms. Bieber. Through the chair to Representative Allard, I think that would be a better question for the sponsor of the bill. I'm sorry he wasn't able to be here today. Thank you. Thank you for being here then.

Okay. I don't see any further folks. We do have a fiscal note. Ms. Robb, Sylvan Robb, if you could come up again and walk us through the fiscal note for SB 29 here.

Thank you, Mr. Chair. For the record, I'm Sylvan Robb, Director of the Division of Corporations, Business and Professional Licensing. So again, this is a fiscal note for OMB component number 2360. The control code is B-V-L-Y-B.

And you will see costs that are included in fiscal year '27 that are already included in the governor's budget of $211,600. And that same cost continues in the out years of the fiscal note. As was noted earlier, the costs for this position are paid for by the licensing fees that are covered by this board. And really, the, the thing that this fiscal note is changing, because this position does exist and these costs are already being covered by licencies is to move the position from being a temporary position to becoming a permanent position. Great, thank you.

Any questions on the fiscal notes? Seeing none. So effectively it's just using DGF money to pay for the position. Okay, uh, seeing no further questions, uh, if there is nothing else for the sponsor, I'm going to go ahead and set an amendment deadline for this bill, SB 29, set the deadline for May 13th. That is Wednesday at 5 PM.

So again, Wednesday, May 13th at 5 PM, if you can submit your amendments to Ms. Helen Phillips or my staff. Mr. Brody Anderson, Representative Bynum. Thank you, co-chair. Um, I don't want to slow up the process here or question the amendment deadline, but if there were no amendments being desired from the members There is. Okay, thank you.

Okay, you're on top of it. I apologize, this was just double-checking. Always good to double-check for sure. Thank you. Okay, so with that, thank you very much, Ms. Bieber and Ms. Robb.

So I think we have an amendment to take up for the next bill, which is the bulk fuel loan bill, and we just want to make sure we have our full complement of folks here. So let's just Oh, we have. Okay. So we'll just jump right into that bill then. And let's find my place here.

Okay. So the next item of business before us is the Bulk Fuel Loan Cap Bill. That is House Bill 388.

We do have one bill before us, and let's see, maybe if we could just get the brief recap in terms of what the bill does. Is Mr. LaBolle here? Representative Ellard, go ahead. I'm sorry, co-chair, just to backtrack, did you give us the time that the amendment deadline was for the last bill? You said 13 May, was it 5 PM?

Correct, 5 PM. Yes.

Okay, and so we are on House Bill 388, bulk fill loan cap bill. After this, we'll take a short break before we go into the gas last line bill, and that'll be the final bill on our docket for today. So we'll take up the amendments, and if it's the will, we'll make a decision on the bill, whether or not we move it. So, Mr. LaBolle. Thank you, Mr. Chairman.

Paul LaBolle, staff to Representative Foster and staff to the Finance Committee. The bulk fuel loan bill doubles the loan cap on bulk fuel loans from $750,000 to $1.5 million.

And I believe we had a question. Representative Galvin, go ahead. Sure. Thank you, Mr. LaValle. My question, a couple of them.

One of them is when these loans are paid back, do the funds go into a specific fund? That is not part of our UGF or does it go into the UGF? If you can answer that and if we need to have ledge finance, I believe they may be here. Mr. LaBulle? I would of course defer to ledge finance but it is its own separate fund.

Representative Gelman? Thank you. I think I would like to know just a bit more about that fund then and whether or not we anticipate if this bill clarifies, does any of it go back to repay the UGF that was set aside into— back into UGF or opportunity for us to use statewide or if it becomes more or a larger fund for the fuel loans. Mr. Painter, if you can come up and put yourself on the record. And I, maybe I'll let you address that.

I think I know, well, I guess maybe I'll go ahead. I think a little bit of the question may have to do with when the money is paid back. First of all, I guess you have the order in which, where does the money come from? And assume that the amendment is passed, or if it's not, I guess what happens. But I think currently as it stands, the fiscal note right now says that money shall come from any surplus out of the FY26 budget.

There may be no surplus. And so I think there's going to be a backstop amendment which says if that's not the case, then it shall come from anywhere. The order in which the money does come out, will that affect, for example, education funding or anything else that may be out there? Would this come before that? And I don't know, Representative Galvin, if I've enunciated that well enough.

I think you have articulated— thank you, Co-Chair Foster. Through the chair, I think that articulates it pretty well. What I had When I reviewed my notes, I saw that it is sort of a waterfall and we will see energy relief first and then K-12 funds after that. And I just wanted to have more clarity. If we know that we are making that decision, that is fine, but I want to make sure we are doing it with our eyes wide open and also understand whether or not it would be— make fiscal sense to put some guardrails around that.

Mr. Painter, if you can put yourself on the record. For the record, Alexi Painter, Legislative Finance Division. So through the chair, Representative Galvin, generally with a revolving loan fund, the legislature can transfer money in and then the department may continue to loan it out. As loans are repaid, they go back into the fund, which is how it revolves. As, as loans are paid, you can pay out new loans.

With, with a lot of loan programs, the legislature will revisit that over time and determine If there's insufficient or excess capitalization, they can then transfer it in or out as needed.

And that, that's happened frequently, as you saw in the capital budget. We're spending money from an old revolving loan fund where there was excess money at the end, for example. The fiscal note, as it is currently drafted, contemplates adding money in the FY26 supplemental, and that money would remain in the fund until the legislature chooses to withdraw it. So if next year oil prices have gone way back down and there's not an anticipation of needing a lot of money in the fund anymore and it can go back to the regular balance. The legislature at that point could choose to withdraw the money.

The proposed amendment, which I don't know if it's in front of members, so I'm not sure if I should speak to it or if I should wait until that's in front of members officially. I would say go ahead and speak to it and then we'll introduce it here in a moment. So the proposed amendment contemplates a different appropriation structure than would be typical where If there's a shortfall, money would be appropriated into the fund, and then the— whatever source of that extra money was in would get repaid when the loans come in. So rather than permanently growing the fund, it would just sort of— we'd appropriate money in and out in one. That's not how they typically work, which is why the amendment proposes to put that into the language.

Otherwise, that would not be sort of the way revolving loan fund typically works. Thank you very much. That very much answers that one part of the question. And the other question I have is related to You had mentioned when oil prices go up, this would necessitate, typically, more need for fuel loans. Absolutely understand that.

What would you— could you imagine that there might be some sort of a trigger mechanism, let's say, when oil prices increase greater than 25% in one year or within 3 or 6 months or whatever the number is, that then these guardrails become open so that it makes these loans easier to access. Does that make sense? Like there would be some trigger mechanism as opposed to us saying here around the table when they go up. Mr. Painter. Through the Chair, Representative Galvin, the most straightforward way to do that is just have more money in the fund.

We would have to appropriate the money at that point. You can't have a standing appropriation for future money. So You could put something in statute saying if prices go up, then the loan fund increases, but that would still be subject to appropriation. So it would still have to happen at that point. Thank you.

Okay. Representative Josephson. So this may be cleaner if the amendment number 2 were offered, as Director Painter noted, but I do have a question about it. Are you familiar with this?

Document. To Mr. Painter, can we just offer the amendment? Yes. Representative Bynum, would you like to offer your amendment? Thank you, Co-Chair Foster.

I offer amendment 2. I'll object. Okay. Representative Josephson, actually, let's, let's let Representative Bynum explain it and then we'll get into it. Sure.

Thank you. As we discussed previously in the committee, Co-Chair Foster, The— we really are stuck with an issue of timing here, and that is how do we capitalize the bulk loan fuel— fuel loan program. And one way that we can do that is we can just make a direct appropriation into it, and then that money is locked up into the fund, and if it's used for the purpose, great.

But the question at hand is whether or not we want to dedicate those dollars to the fund for the temporary— temporary crisis. And that's a policy decision that this committee and the rest of the legislature will have to make, specifically through our conference committee, as the operating budget currently is sitting in the conference. So working with Ledge Legal and talking with Mr. Painter, we crafted basically this temporary law which would allow for that temporary funding to be appropriated into the Bulk Fuel Revolving Loan Fund. And that temporary appropriation would then also be subject to repayment with interest back to its original source. My understanding of the way that this amendment was drafted was, is that it will be basically a determination of the conference committee that they may appropriate the money.

Through a fiscal note process, but they are not obligated to do so. And the selection of fund source would also be something that they would have to decide. And then obviously concurrence when all this is done comes back to the legislature through the appropriations process. So in short, the language here does seem a bit confusing because it is. Secondly, that this does create basically a temporary law.

We aren't going in and updating and creating new statutes here. We are creating temporary law here, which then allows for this mechanism to work. Representative Bynum, was that Amendment Number 1 that you introduced? Amendment 2. That was Amendment 2?

Correct. Amendment 1 was already offered and I believe withdrawn. Withdrawn at a prior meeting. Okay. Just wanted to be sure.

So for the record, we are on Amendment Number 2. Representative Josephson? Yes, a question for Director Painter. Director, the fiscal note itself that was prepared by, uh, I think my colleague Brody Anderson, I suspect, um, in the middle of the page it says estimated supplemental FY 2026 cost. It then has a blank space, separate supplemental appropriation required.

So it seems to touch on the subject of FY 26. And of course, I understand it being blank because it's indeterminate. This amendment, Amendment Number 2, A.2 for the record, focuses on making an appropriation for the fiscal year ending 2027. And my concern with that is, is the following: the capital share and the operating share and our other conferees are making plans, as we must, for FY27 spending. Our eyes are clearer in the distance as to what's happening in FY26.

The war continues. Prices remain high. We probably will have some residue or excess, and I would prefer the conference committee be able to use FY26 option when it meets in the next 8 days or whenever. In order to achieve that, would line 6 need to be amended in some way? Mr. Peacher.

Through the chair, Representative Josephson. So the fiscal note works with the underlying bill to provide a permanent appropriation in The amendment allows the ability to do a temporary appropriation in FY27. If you would like to do a temporary appropriation in FY26, then as you said, the amendment should probably be amended to say in FY26 or '27, or it could be and/or '27, I suppose, allowing appropriations into the fund, temporary appropriations into the fund in either year. Representative Chosoussin. Mr.

Chair, I believe that— and I say this because I believe Representative Bynum is absolutely trying to help the Finance Committee and rural Alaskans— but I move an amendment to Amendment 2 to add at line 6, fiscal years ending June 30, 2026. And June 30, 2027. So insert between ending and June the words June 30, 2026.

Okay. Or, or June 30, 2027. And/or? If you could repeat that, Representative Josephson. Sure.

So line 6 of the amendment, Amendment No. 2, 8.2 By Mr. Bynum. I would read fiscal year ending June 30th, 2026, or— and that's where the amendment would end. And/or. Okay.

Okay. I'm going to object for purposes of discussion. Representative Bynum. Yes. Thank you, Co-Chair Foster.

I absolutely don't have any issues with that. I guess the only question I would have in this alleged legal question or alleged finance question is, is if we would be restricted to one or the other by saying or, or should we be saying and/or? Mr. Peicher. Through the chair, Representative Bynum, I think and would be more inclusive, but I defer to Marie Marks with legislative legal for that question. And we do not have Ms. Marks online.

Let me— oh, we do have— oh, we do for the gas line. We've got Ms. Marks. Ms. Marks, if you can put yourself on the record.

Yeah, Marie Marks, legislative legal services. To the chair, or through the chair to Representative Josephson. I would recommend to accomplish your intent to use the word 'and.' So line 6 of the amendment would read 'fiscal years' for the fiscal years ending June 30th, 2026 and June 30th, 2027. And then to make.

Screen changes, I would recommend changing on line 8, removing that reference to the balance being on June 30, 2026, and changing the words on line 7 and 11 to say, instead of saying "to each eligible borrower," to say "to an eligible borrower" on line 8, and on line 11 to say "to the eligible borrower." Representative Josephson.

Yes, through the chair, Ms. Marks, can you repeat the eligible borrower changes you recommend?

Yeah, remarks, legislative legal services. Line 8 would read—. I'll just read the lines 7 and 8. I think it makes more sense to read them together. It would read, "If the unexpended and unobligated balance of the Bulk Fuel Revolving Loan Fund, AS4245.250, is insufficient to make a loan to an eligible borrower." And then we would go down to line 11 that would say, "To fund the amount necessary to make a loan to the eligible borrower." All right, and I would probably turn to, uh, Lexi Painter to make sure for practical purposes whether that works.

And then I'd probably also turn to Megan Wallace, who answers procedural questions, to make sure that with that change procedurally it would work in a conference committee fiscal note. Mr. Beecher, through the chair of Representative— or to the chair of Representative Foster, I suppose. Um, I think, I think that, that change works from a practical perspective. As far as I can tell. Ms. Megan Wallace, if you can put yourself on the record.

Ms. Wallace.

Hello, this is Megan Wallace, Chief Counsel for Legal Services. To answer the question regarding procedurally, I also agree that that change will give the conference committee adequate flexibility to decide whether FY26 or FY27 funds are going to be used to capitalize the bulk fuel revolving loan program. Representative Josephson, I'd like to withdraw my amendment to the amendment and restate it. Okay, Representative Josephson, so I'll move Amendment 2. I think that Amendment 2 to the amendment, right?

I'll call it Amendment 2. Amendment 2 to Amendment 2, uh, the effect of which would start at— if we go to line 5, subsection A, it would say, uh, quote, for the fiscal years ending June 30, 2026 and June 30, 2027, comma That's how line 6 would end. And I know we have several lawyers listening in. And then at line 8, I think, as I understand it, the only change would be following 2026 is insufficient to make a loan to an eligible borrower. So delete each, insert an.

Is there more?

Representative Josephson. Well, and then at line 11, delete each and put in the. And I guess, I guess we're being told to delete on June 30th, 2026 in line 8.

Okay. If we do move this bill out to whomever makes the motion, we should probably add the words in to make technical and conforming changes. Yes. So Okay, so with that, I, I don't hear an objection to amendment number— conceptual amendment number 2 to amendment number 2. So that has been adopted.

That takes us back to the original amendments. And we have any further discussion on amendment number 2 as amended? Representative Hannon. Thank you, Chair Foster. I guess I just want to articulate and my understanding is this amendment will make our capitalization of the bulk fuel revolving loan fund temporary.

So it is only for the next 2 fiscal years to address those. And I guess I'm just sort of planting that seed because we are permanently increasing the cap, but we are not capitalizing it in a permanent way. And I'm okay with that. That addresses our impending crisis. But I think when we look back at the cap on the bulk fuel loans has been a stagnant amount, and I think we will need to— a legislature, the 35th, is likely to need to revisit it because although this is addressing what we see as an imminent and trying and temporary need, I think expanding capitalization statutorily is a good idea and that we probably should capitalize it further.

But this is happening late in the fiscal year, and I understand the temporary nature, and many people are optimistic that the prices will return to a lower amount. But, um, I just think that we need to footnote that this is a temporary capitalization, but we are statutorily permanently increasing the cap, and in a couple fiscal years we need to address what could be a dichotomy of we haven't capitalized it enough to meet the needs that we have allowed people to borrow against. And I'm okay with that, and I'm going to support the amendment and the passage of the bill. Okay. Representative Bynum.

Yes, thank you, Co-Chair Foster. Just a clarification from the comments from Representative Hannan. It's my understanding, and legal and alleged finance can correct me, that there isn't a prohibition against capitalizing the fund of some level, but that this amendment gives the flexibility of providing a temporary bridge of additional capitalization if necessary or desired. Is that an accurate—. Mr. Painter?

Through the chair, Representative Bynum, that's correct. Thank you. Okay, any further discussion? Representative Jimmy. Thank you, Co-Chair Foster.

My question is to Mr. LaBulle. Um, with these changes, do you see this as a friendly change as well as amended. Mr. LaBolle. Yes, thank you, Mr. Chairman. Yes, I think it's well intended and it seems like a friendly amendment.

Oh yeah. Okay, seeing no further discussion, I don't recall who had the objection. Is there any objection to adopting Amendment Number 2 as amended? Okay, seeing none, Amendment Number 2 has been adopted. And, uh, let's see here.

So with that, um, is there any further discussion? Representative, can I get briefities? Briefities.

Okay, House Finance back on record at 3:04 p.m. Are there any further discussions? Representative Tomaszewski. Yeah, thank you, Co-Chair Foster. While Lexie—. Director Painter is up, what is the interest rate for this loan fund?

What do— is there an origination fee or anything that the, um, borrowers have to go through? And what is the interest rate that —what they pay for that. Mr. Painter. Through the Chair, Representative Tomaszewski, I don't know if the department is online to answer more definitively. My recollection from their presentation is the interest rates are typically 1 to 4%, but the department could probably give a more definitive answer.

Ms. Sandra Moller, can you put yourself on the record?

Yes, hello, this is Sandra Moller, the director. Ms. Moller, we are having a hard time hearing you. Are you on a speakerphone?

No, but let me see if I can change again.

While we are waiting for Ms. Muller, Representative Snap. Thank you, Chair Foster. I mean, while we are waiting, ask her the non-performance rate too, if she knows, I guess. Okay. Representative Ballard.

Ask her if she also knows what the default rate is. I think we will take these questions one at a time, so we will wait for her to come back on here. Ms. Muller, are you still looking for another phone? Yes, Mr. Chair, this is Sandra Muller.

Can you hear me? We can. Maybe if you speak up a little louder, it might be a little better.

Did you hear the first question with regard to the interest rate?

Yes, I did. Through the Chair, the interest rate.

The interest rate is between 0% and 4% depending on the actual time, the number of times the loan— the borrower has borrowed. The first year is 0%, and after that it ratchets up to the 4%, but can go down 1% per year for good repayment, down to 2% at the lowest. Okay, thank you. Okay, and next question, Representative Stout. Oh yeah, I don't— that's all right, Co-Chair.

I want to get to the other bill. Thanks. Uh, Representative Ellard. Yeah, um, thank you. I just wanted to check to see what the default rate is.

Ms. Mohler.

Yeah, through the chair to Representative Ellard, we have an approximately 99% recovery of our loans in the past. Perfect, thanks. Representative Bynum. Thank you, Co-Chair Foster. Just really quick, I wanted to ask alleged legal and/or alleged finance if there was any other information we needed to put on the record to make sure that what we're trying to do here is clear.

I just wanted to— I know that the legislative record here is an important part of what we're trying to do because of the mechanism we're using, so I just want to make sure that we've covered all of our bases. Mr. Painter.

Through the chair, Representative Bynum, I think it's clear. I think the one thing I'll note is that the fiscal note with the amendment should probably be changed to be indeterminate for FY '27 as well versus the current FY '26 only. But that can be done as a forthcoming fiscal note. Okay. Ms. Marks, do you have any comments?

Remarks? Legislative Legal Services. To the chair, no, I think it has been covered sufficiently on the record for legal purposes. Okay, thank you very much. Okay, if there are no further questions, uh, Representative Sharagi, I would entertain a motion.

Yeah, thank you, Co-Chair Foster. I move HB 388, Work Order 34-LS1670/A, out of committee as amended with individual recommendations and attached fiscal notes. House Finance Committee authorizes legislative legal to make any technical and conforming changes as necessary. Okay, and Seeing no objection, House Bill 388, which is 34-LS1670/A, moves out of House Finance Committee as amended with individual recommendations and attached fiscal notes. And we are also giving— authorizing House Finance Committee to make technical and conforming changes as necessary.

And with that, if folks can sign the yellow committee report We're just going to take a quick 5-minute break to let folks stand up, stretch, get a little bit of coffee, use the bathroom. And so I'm going to call a eddies at 3:09 PM.

Okay, House Finance back on record at 3:20 PM. My understanding is that we have about an hour before we go back to the floor. I think conference committee occurs at 4 o'clock, but I think we're going to continue to continue on with this presentation on the gas line. And so we're gonna pick up where we left off yesterday. So before us again, House Bill 381, that is the oil and gas property tax and municipal tax bill dealing with the gas line.

And when we were last hearing about this, it was with— from Glenfarron. And so I'd like to invite up Mr. Adam Prestidge, president of Glenfarron Alaska, LNG. And if we could have you come up and— I don't see Mr. Busage. Okay. And also I see Mr. Mark Begich with the administration, representing the administration, is also here online for questions.

We also have Matt Kissinger, Commercial Director of Alaska Gas Line Development Corporation, as well as David Herbert and Owen Stevens, commercial analysts, and they're from the Department of Revenue. And so what we'll do is we'll get through the presentation because this is a little more complex. Frank Richards also up at the table, thank you for being here. And, and what I'd like to do is go ahead and allow for questions as we're going through this. It's more technical, a little more complex.

I know there are a lot of questions, and so as folks have questions, feel free to ask them as we go through the presentation. If we have time afterwards, we are going to have Mr. Calvin Zulo, staff to the House Resources Committee, will come up, and he is just going to walk us through a presentation that was provided— let's see here— just to talk about, I guess, the bill as it what came from the governor and then over to their committee and what came out and what changes were and so forth. So what I really want to do is try to back up as much as possible and kind of felt like at the last meeting we jumped into the process halfway without kind of building up a nice foundation of bringing us back to the beginning. So I'm hoping at some point we can kind of get maybe a little more into that. And so with that, who would like to start us off?

Mr. Bigich. Thank you, Mr. Co-chair, and to the members. What we'll do is we'll kind of come about 3 slides in. I'll move the screen here in a second, give you that overview. We've also added some additional information based on your request to kind of give kind of a baseline.

Frank Richards will go through that, and then we'll be available throughout, as you said, for questions. But we want to kind of jump a little bit and then get into that baseline. Baseline for you. That would be perfect. Thank you so much.

Chair Foster, Adam Prestidge from Glenfarm Alaska for the record. Thank you for having us here again. Before we jump into talking specifically about the Alaska LNG project, I want to share just a couple of words about who Glenfarm is for the record. For some of you, we're still getting introduced. Glenfarm is a US-based infrastructure investor, developer, owner, and operator.

That means that we come into the full life cycle of a project. We're willing to take it from the ground up, from before it even has permits, all the way through running it through its, its decades of operations. We own and operate 60 infrastructure assets up and down the Americas. That includes the full suite of traditional natural gas power generation, renewable power generation, solar, wind, and hydro, diesel, grid stability, and battery power. Our clients and customers in Latin America include sovereign governments.

And so in the nation of Chile, the nation of Colombia, we provide the grid stability to the national grid to ensure that the population there maintains reliable energy supply. Supply. It's critical because it underpins our commitment to good operations to— and to showing up when it really counts. One of the proud moments for us as a company was in February of 2025, the nation of Chile experienced very near blackout as the solar irradiation in the nation of Chile was lower than anticipated. The country was on the verge of serious underperformance of its solar power generation assets.

And so the network of grid stability diesel backup facilities that we had built from scratch, that we had put together, all run out of a central operating center in Santiago, Chile. That fleet of power plants came online within a few minutes and kept the nation of Chile from going into a much broader blackout. We play a similar role in the nation of Colombia where we've provided similar critical, critical energy infrastructure stability, particularly in times of droughts when the hydropower that powers a lot of Colombia hasn't been running. I bring that up, one, to help you understand our infrastructure background, that we know how to run and operate these plants, but also just to emphasize that we're used to doing high-pressure, critical infrastructure that nations and countries and populations rely on to keep their economies running. That's the same type of commitment and capability that we are bringing to this project here now.

We are not a private equity fund or a hedge fund. We're not a publicly listed company, and so what that means is we don't have fund type timelines that require us to sell out of, out of projects by a certain time. We don't have quarterly, quarterly shareholding reporting that we have to do, so we aren't driven by quarterly financial results. We're able to take a.

Long-term view to the projects that we're in. And so all of those are reasons that reinforce why we look at the Alaska LNG Project and being part of it for, for a long period of time.

Got a question, Representative Minam. Thank you, Co-Chair Foster. Through the chair, thank you gentlemen for being here. I'm just going to be blunt. You know, we got a tax bill in front of us.

There's being a recommendation for different elements within this tax bill about what we want to see. I want to get right to the brass tacks of it. I'm sitting here assuming that your company is well qualified to do what needs to be done. We're talking about a $40+ billion project here, and the task we have at hand to try to get accomplished in a very short period of time is the rationale for the tax structure. So anything that we can do to get to that would be very helpful for me.

I'm— again, I appreciate your company background. I appreciate your capabilities. I assume that those things are all true. My perspective, I just want to get right to it. Background of information necessary for us to get a good bill for Alaska out the door.

So thank you. Thank you, Representative Bynum. I think they may have been trying to comply with my ask to try to bring it back a little bit because at our last meeting we kind of jumped right into the bill. We were talking a lot of technical things. I haven't watched the House Resources Committee like some other folks may have, and I thought that we should try to get some background and certainly if there are areas where this, you know, for example, some of the history, maybe, um, you know, it might, um, use your judgment on that, Mr. Prestidge.

But, um, for me, I know that, um, you know, when we start talking about volumetric this and property tax that and, you know, who's getting what and so forth, um, we kind of jumped right into the bill, and I just have no background on any of this. And so I just, um, had asked that we had Maybe try to build up a nice little foundation. Representative Galvin, did you have a—. [Speaker:GALVIN] No, I think I will just add one more piece to your comments. I absolutely agree, especially since we're mixed here in terms of our levels of understanding.

And I will add to that, when it comes to pieces like what our constituents will be paying that's important to me, what they will be paying for their energy, and any context you can give to us around that. And also something around these jobs that are so exciting, over perhaps as many as 12,000. I know they won't all be by that particular company, but to understand whether or not we can have any labor agreements associated with that. Some of the better understanding around those jobs. Those are the two pieces that I would love to be enveloped into this presentation.

Thank you. Thank you. I think one of the issues that we've got right now is I think Representative Galvin, you hit the nail on the head, which is we all are kind of coming at this from different levels of understanding. So we're going to try to bring everybody up to the same level here. And then we have to understand who all the stakeholders are and who wants what and what are the pros and cons.

And there's just so much to get into here. And so with that, Mr. Begich. Mr. Co-Chair, what we can do is over the next few slides, we'll move through that fairly rapidly. But at the same time, we want to be available for those questions. This will give you kind of a status of the project, and then we'll go right into some of the questions that were asked at the last meeting.

And then there will probably be additional questions that people will want, and we'll accumulate those. But that might give you I think it was important to hear what the company is, because frankly, we have heard from different members who's Glen Farn, and I don't represent them, so they need to speak for themselves. But at the same time, I think we need to talk about the project so you know where it's at right now and then get right into those questions. Would that be acceptable? Absolutely.

Okay. Mr. Prestidge? Thank you, Chair Foster. Adam Prestidge. For the record— do you mind going to the next slide?

Thanks, Mark. Oops. A brief overview of the construction. When we talk about the construction of the project right now, we're speaking about the Phase 1 pipeline. And so when we speak about Alaska LNG in general, that project incorporates the 700— an 807-mile pipeline from the North Slope to Nikiski, Alaska, the large gas treatment facility on the North Slope to treat that gas to remove CO2 and other elements and bring that gas down to LNG-worthy specifications, the pipeline, and then the LNG export facility in Nikiski.

As for reasons that we discussed in Friday's session, the path forward on this project is to finance and build the Phase 1 pipeline as an independent project. And so we have got some details here that I won't go into on how that will be constructed, but I will say we have a very well-established construction plan with construction contractors designated, an engineering procurement construction management firm, Worley, slated to run the coordination of the project. And so happy to talk more about that. Offline if anyone has any questions. I would like to note that we have with us Representative Elam as well as Representative Dybert.

Thank you for joining us and please proceed. Representative Bynum has a question. Yes, thank you for that. Thank you, Co-Chair Foster, through the chair. So as we go through this process, you had indicated just now that we have some kind of a timeline that we're trying to meet.

And I get phone calls from small businesses that are Alaska-owned that are saying we need to make some kind of obligations to be able to be able and available to do this work. And every day that we delay this project is an opportunity for Alaskan businesses not to participate here. And they're putting millions of dollars on the line right now to get prepped for ordering equipment and getting their personnel set up and in line. And so as we go through this process, We talk about timelines, keeping those small businesses, Alaska businesses that are in our communities, um, in mind is an important part of that. And I want to know if they're going to be impacted by delay in that timeline you just mentioned, and what part of this is part of that delay.

So like I said, I'm getting phone calls right now. They have purchase orders, they got to bring big machinery in here. Alaska businesses, and they're going to be canceling orders because we don't have a progress forward. So again, I'm just— the urgency, you know, about where we're at when you talk about timeline and details, they matter right now. Representative Galvin.

Thank you. I wondered if you could give us a little bit of context around what we're hearing from the member of Ketchikan. Are you asking small businesses to place orders, hire up, and get folks ready? Is that something that's happening all over the state already? I'm just trying to have a good sense of where we're at.

Representative Bynum, Representative Galvin, through the chair, Adam Prestidge. The way, the way to answer that is that we have gone through and we are in the process of various selection processes. To identify the contractors that will perform the scopes of work on the project. That includes the major pipeline contractors who we have already announced conditional awards to, as well as 10 other scopes of work for— that will have participation from Alaskan contractors. That includes logistics, early works, camps installation, fuel supply, transportation, et cetera.

So those discussions are ongoing, and our team is working with those contractors to make sure that that timeline is being managed very closely with a very close dialogue. And right now, to my knowledge, we are not asking anyone to put any purchase orders down. I think that is part of the firm's preparation for the project. Follow-up? Follow-up.

Thank you. So if I am hearing you, as of yet, no purchase orders out. But you are finding out what the capacity is throughout the state. And I guess what I'd like to know is, is the work we're doing today— if it takes us 2 weeks or 3 weeks, does that mean we are hampering your ability to get your work done? Mr. Prestidge.

Representative Galvin, through the chair, I agree with what you're saying about purchase orders, that we haven't asked anyone explicitly to go out and make purchase orders without having any kind of binding contract or any kind of confirmation that they will be chosen for the work. That is certainly not what we are doing. I will say that what we are doing is time sensitive and there is a window of opportunity on this project that we think exists right now with— and that is the matter of bringing together financing sources and customers and there is certainly a window of opportunity and a desire to see this project supported from a federal level. As we've talked about in other hearings,.

There is certainly the, uh, the global market has an interest and a demand for LNG coming from Alaska, particularly with everything that's happening in the Middle East right now. So bringing all that together, this project is, is near to an FID. There's a lot of work that needs to be done to, to close everything out, but we are in the point of time where, where gating items and, and particularly this process, if it were to extend for much longer, does start to become a real gating item on achieving a final investment decision. Thank you. Mr. Biggich.

Mr. Co-chair, to add a little more to that, as you know, Alaska contractors, they— there's a limited supply of them. And so they think, you know, 3, 4, 5 months ahead. And so they are watching what happens here and they are kind of thinking, can I fit this in? It is a great project for any of those Alaska contractors because it's multiple years. And so they're They would love a contract like this to be part of.

But if they're delayed, they have to make other decisions. And so everything— every day matters to how you deal with it, especially right now. We're in the supposedly spring time. So thank you. Representative Hannon.

Thank you, Co-Chair Foster. Is there an obligation in the legislation or in Glenfarn's operating procedures to hire Alaskan contractors to do the work? So, President— President Hannon, through the chair, I will ask Frank Richards to make a comment on this. But, but yes, part of our, part of our agreement with this, with AGDC, with the state of Alaska, is to prioritize hiring Alaskan contractors. Mr. Frank Richards, can you put yourself on the record?

For the record, Frank Richards, president of the Alaska Gas Line Development Corporation. Through the chair, Representative Hannon, There is no specific requirements in the existing legislation or the existing statutes that govern AGDC, but also the proposed legislation. But I will say in our negotiations of the agreements with Glenfarm, we put in place what are known as the Alaska Advantage principles. And this is where we ask Glenfarm for the commitment to do several things. Number one, look for the lowest cost gas for Alaskans.

Allow for gas up to 500 million standard cubic feet a day to be able to be provided to Alaskans at potentially differential rates, and then look for the opportunity for Alaskans and Alaskan contractors, Alaskan content to be maximized for the— during the construction and ultimately operation of this project. Follow-up?

So thank you, Chair Foster. Mr. Richards, it sounds like these are all sort of generous overtures, but nothing specifies. And of course, in general, as Glenfarm was describing it, they're used to dealing with sovereign nations, I would say probably international-size firms, and most Alaskan contractors aren't of the size and scale that you're used to dealing with. So when we talk about small small businesses in Alaska. Do we have— are you putting, besides principles, anything in like a, you know, 20% of hires will be Alaskan contractors?

Not just labor agreements, but Alaskan businesses getting the work for whatever they can, even though they might— it's unlikely there's an Alaskan contractor who's sitting around who's of the capacity to build an 800-mile pipeline. Because they haven't had that work in 45 years. So they're probably smaller in nature, but are we intending to hire Alaskan contractors of all size and scale to do work even if it costs us a little more? [FOREIGN LANGUAGE] Representative Hannan, if I may. Again, there were no hard metrics that we provided in these agreements that Glenfarm makes sure that the contracts hire X percent of Alaskan contractors or workforce.

It's more that the reality of this project is that it is of such large magnitude that Alaskan contractors and Alaskan workers are going to be a significant part of this project, probably to the maximum extent of their capabilities. I've been involved in my role now as a minority owner representing AGDC in the state is in a governance role overseeing what Glenfarm is doing in the project execution. So that's part of the, the mantra that we continually communicate to Glenfarm that Alaska content is absolutely necessary. But I also say in terms of my interactions with not only the contractors but with Glenfarm is Alaskan contractors are engaged right now. They are working on and putting forward bids to work on this project.

We'll go through the slides here and identify the different scopes of work. The mainline pipeline contractors are again mostly US-based out-of-state, but the early works, which are the bread and butter of Alaska civil contractors, Those are going to be all Alaskan contractors. So I would just represent to the committee that Alaskans are being part of the bidding process and will be part of the project. And that was Mr. Richards for the record. Representative Hanna, do you have a follow-up?

No. Okay. Representative Josephson. Well, I just want to be clear. I thought Representative Bynum said something to suggest that Somehow we weren't expediting over this committee.

I don't know if the reference was to the legislature or the committee, but we've been at this for 72 hours, I think, is when we got it. Another— yeah. And the bill dropped on March 20th.

Everyone knows what's happening. The—. We lose authority to work as a legislature in 9 and a half days. We are going to do everything we can to get through this. But I don't feel any responsibility at this point for not moving expeditiously.

We have just begun this exercise. Thank you.

I was told that the Senate Resources Committee heard this bill, I think, 23 times, something like that. 26 Times. 26 Times. And House Resources has had it for a month and a half and we are trying to push this out in a few days. I feel a lot of— probably a lot of what you might feel, which is it is going to be difficult to get up to speed, but we are definitely, as you mentioned, Ripsa Josephsin, I think we are trying here.

With that, Mr. Pestidge, did you want to finish this slide?

Chair Foster, if I may, I would like to just take a moment to check and make sure kind of at your direction, I can continue walking through a little bit of the project outline and details if you would like before kind of getting into the next portion of the presentation goes into the relationship, the contractual relationship and structure between Glenfarnon and AGDC. So—. [Speaker:CHAIRMAN BRYANT] Sounds good. Please proceed. [Speaker:MR. BATTLES] Okay.

I will go quickly through this slide on design. What I want to highlight on this slide is that we have completed a FEED process, which is the front-end engineering and design process on this pipeline. We've completed it to the level of a Class 2 estimate. And so that is a very high-quality cost estimate. That is the type of engineering and pricing estimate that you can literally take to the banks and finance around.

And so that was completed back in December of this year. That gives us a very strong set of confidence that this project can be built as it is designed.

I mentioned this slide in our last hearing on Friday, but just to reiterate, when you look at the 8-star group putting together this project, it is not merely AGDC and Glenfarn. We also have strategic partners engaged as suppliers and investors: Worley, Baker Hughes, POSCO, Denel Shipping, and then another very large U.S. equipment manufacturer. Additionally, those that have joined with us in various levels of contracting and appointment, the major producers on the North Slope have each announced their alignment with the project. Exxon, Hilcorp, ConocoPhillips, Great Bear, our contractors that we have conditionally awarded to play the major roles as the lead construction firms on the pipeline itself, for the pipeline construction, listed there on the second row. And then some of the largest line pipe and steel suppliers in the world are prepared, are holding space, are basically ready to start producing pipe as soon as we give them the go-ahead with the purchase order.

What I want to flag just on this last slide, just kind of about where the project is up to, this is really, really important and really is a testament to the success of the project and quite frankly, in my opinion, the level of interest in the project that has been generated since Glenfront came into ownership of 75%. So these are customers that have publicly indicated either signing letters of intent or heads of agreement with pricing to buy LNG from Alaska LNG. Any negotiation for an LNG purchase is a multi-month, sometimes years-long process. These contracts over their lifetime have a value of tens of billions of dollars, so they're not things to be done quickly. They start— they're part of a process.

Starting this process with a public declaration for a letter of intent that is endorsed by.

Either the heads of state or the energy ministers on both sides is exceptional. There's— there aren't— that doesn't happen in this industry. It's happened for Alaska LNG for almost its entire volume. We need to sell 16 million tons under long-term contracts. We've currently got allocations, public allocations for 13 million tons.

I'll just take a moment to tick through these. The first you see there on the left, that's CPC. That's the National Oil and Gas Company of Taiwan. They have signed up, they have committed to buy 6 million tons from the project. That would be one of the largest LNG contracts ever entered into in the industry's history.

The second here, National Oil and Gas Company of Thailand, PTT, is extremely sophisticated, knowledgeable national oil and gas company. JERA, the next, the largest buyer of LNG in the world, one of the leading Japanese utilities, as sophisticated and knowledgeable of an LNG purchaser as exists. POSCO, one of our partners and steel suppliers, is also buying 1 million tons of LNG, and that's signed up under a priced set of terms, so we know the price that's been negotiated with them. Tokyo Gas, like JERA, a sophisticated and large buyer of LNG out of Japan. And then lastly, this is important, TotalEnergies has committed for 2 million tons.

Total is different from the other customers because they're not an LNG consumer, they're not a downstream utility buyer of LNG. Total is an energy company that also knows, that also does LNG development, and to have such a large and capable company as Total signing up for volumes out of Alaska LNG is really a testament to, uh, it's really a validation from an, from a fantastic partner, uh, to the viability that they see in this project. This is where we stand today in terms of a strong level of customer interest that helps push this project forward. Mr. Bagich. Mr. Co-chair, the other thing to note here, this is what they need to get to is 16 of the 20 million tons that's available in this project.

Okay. Got a question, Representative Hannon. Thank you. First, the simple one. Mr. Prestige.

Mr. Prestige, and thank you, Chair Foster. Who is JERA? What country are they with? Mr. Prestidge. Rep. Samahan, through the Chair, JERA is a utility based in Japan.

In Japan. Thank you. And then thank you, Chair Foster, for follow-up.

Do these letters of intent have expiration dates that they go away and their obligation— and I under— the way you described it, they're not yet bound, but this is a process with many steps along the way to negotiate a firm contract. Do they have timelines in them that if we are not operational by this date, then the letter of intent goes away and they're free to negotiate with somebody else? Mr. Prestidge. Representative Hand, through the chair, any agreement like this, whether it's an LOI or a letter of intent or heads of agreement, is typically going to have some kind of timeline that says We need to have achieved— we need to have documented this under a binding agreement and taken the project to FID by a certain time, or it does— it becomes non-binding in that case. Representative Hannan.

And is that, Mr. Prestige, public information or information we're allowed to know, or— and I guess in a third case, are they all on the same time frame? Mr. Prestige. Representative Hand, through the Chair, what I have described is a pretty standard way of just having an expiration date on these contracts, and that is not publicly disclosed and normally wouldn't be.

Okay. Please proceed. Mr. Chairman, we will go to Frank Richards, who will go through the next slides, which is some of the questions in regards to the structure. And please keep in mind there's two kind of critical dates he'll talk about, which is really 2018 when there was a change in how it was structured before. A lot of people are familiar with that structure, and this new structure he'll go through.

And so hopefully through this it will get people where we are today. Great. Thank you. And for the record, that was Mr. Bagich. And did you want to wait until they explain, Representative Galvin?

Okay. We are going to go to Mr. Richardson and then question Representative Galvin. So Mr. Richardson. Thank you, Chair Foster. Again, Frank Richards.

Richards. Thank you. That is fine. We heard last time that there was a— that the committee would like to hear a little bit of what the structure is between AGDC and Glenfarm. So we put this slide together to be able to really identify what AGDC is, what is the entity H-Star Alaska.

But if I may, just a little bit of history. So AGDC was created in the legislature in 2013 with House Bill 4, House Bill 4, and then 2014 with SP138 gave us a lot of the powers and duties. We were working previously to 2018 with the producers and on the project Alaska LNG. And in 2017, the producers elected to leave the project and give to AGDC, the, i.e., the State of Alaska, the 75% ownership rights that they had to the Alaska LNG Project. So in 2018, AGDC, representing the state, owned 100% of the Alaska LNG Project and was charged by the legislature to move forward with the Alaska LNG Project as its priority.

So in 2018, our board elected to create a subsidiary which we called 8Star Alaska. And its purpose was really to be able to put forward for the financing, maintenance, construction, operations of the Alaska LNG project. Because AGDC as a state corporation could not be divested of ownership rights. But we could through a subsidiary, and that's why we created 8Star Alaska, and then ultimately put the Alaska LNG assets, which were the designs and the permits, ultimately into the project. In 2020, AGDC had gone through the environmental process and the Federal Energy Regulatory Commission gave us the— or provided us the authorization for construction of the Alaska LNG Project.

Along with that came the Department of Energy authorizations for both free trade and non-free trade countries for the project to sell to. At that same time, we shifted from, as you heard last time from Matt Kissinger, from a producer-led model to a developer-led model. This was aligned with what we were seeing on the success of the US Gulf Coast in developing LNG projects, where it was not a large international oil company, but more specifically nimble entrepreneurs that came forward to develop projects and acted solely as a— I want to call them a utility, but as a business mechanism that didn't have the extreme high rates of return of the international oil company. But put forward then tolling agreements to be able to underpin and use what is known as project financing to be able to actually get the funds necessary to construct it. So you needed the creditworthy off-takers, as Adam just showed in that last slide, to have long-term contracts which underpin the financing for the project.

So that was all ongoing. In 2020, we— at the time during COVID there was a push by the Biden administration for infrastructure Development, and it was the first time we looked at taking the Alaska LNG Project and phasing it and taking the initial phase, initially looking at the gas line specifically just to Fairbanks from the North Slope and ultimately down to South Central Alaska. We didn't receive any money from the Biden administration on that, but the concepts struck, stuck with us. So in 2023, as we had gone out and had been marketing the Alaska LNG Project to developers, financiers, LNG operators around the country. We looked to see how we could invite those investors to come into the project.

There was interest. We had several very close encounters, I would call it that, with folks wanting to sign up and work with us. But ultimately, we did not have an agreement with them. But at that time in 2023, we created these 3 series LLCs beneath the Alaska— H-Star Alaska for each of the 3 main subprojects. And why this is important is that when FERC granted us the authorization to construct this project, it was as an integrated project from gas treatment on the slope to the pipeline to the liquefaction facility.

So that was the regulatory environment that we had to live with. And as such then, to construct the project in phases, we had the 3 series LLCs, one for the treatment, one for the pipeline, and one for the LLC created that would allow for independent partners or equity partners to come into the project to allow for a structure that would be able to be marketed with a lead developer. So moving forward then, in 2024, we engaged again with this company called Glenfarm, who Goldman Sachs as well as ExxonMobil had identified to us as potential good partner. And so we engaged with, with Glen Pharma in 2024. We actually then signed a letter of intent with them and began the.

Discussions. They came to Alaska. They heard about the challenges that we were having, not only on our energy but also being able to move this project forward. They showed keen interest. They did due diligence, as we did on them, and the fit was, was there.

So on March 28th, 2025, we actually signed then the definitive agreements and gave the 75% ownership stake that we'd received from the producers to Glenfarm with the commitment that Glenfarm would move the project forward to final investment decision at their expense, meaning there was no more state dollars necessary to move this forward, and that we would retain 25% carried interest in 8 Star Alaska. And what I mean by that is that Glenfarm bears all the cost. Our 25% in 8 Star Alaska holds steady for perpetuity, and Glenfarm has the responsibility to move forward develop the project, seek other partners to be able to come in either through the series LLCs individually or collectively, and move this project forward to fruition and completion. So that is a very short history, but I wanted to give you the structure. And at some point, if there's a desire to see how the cash flows, we can talk about that at a latter time.

Mr. Bagich. Mr. Chairman, Mark Bagich for the record. Also, I want to add, when you look at this, the one in 2025, not only does the state have the 25% interest in the holding company, HSTAR, which again does not require additional capital investment, does not require risk. They're not responsible for cost overruns. They're not responsible for the production cost or the development costs that are engaged in now Glenfarnes.

But the 3 below, this is a later discussion. I know Representative Josson asks all the time on this. So this is the 3 I want to make sure everyone else knows. The 3 below, which is the treatment plant, the pipeline, and the liquefaction plant. All 3 of those, the state will hold an option between 5 and 25% at their discretion of what they want to invest, if at all, at a later time, which will have different risk factors.

Those will be a different discussion that is not necessary for this debate we're in today, but I think is informative to members. Representative Galvin. Thank you, Co-Chair Foster. Through the Chair, I think this might A question for Mr. Richards. So we heard just now, this is more about what— a continuation of former Senator Begich's conversation.

And he's emphasized a few times around the state's current 25% interest in 8STAR as a carried interest and indicated that the state is shielded from any cost overruns, that risk is not there for the state during construction of the pipeline. And I thought that AGDC reported that under the AGDC Glenfarm deal that the state's 25% interest was only carried until FID. And so how is it that the state retains that 25% ownership interest in the pipeline but is also at the same time shielded from cost overrun risk? Mr. Richards. Through the chair, Representative Galvin, again, on the, on the chart and label 2025, again, the carried interest is at the 8 Star Alaska level, right?

So that's where, as a lead developer, Glenfarm is leading 8 Star Alaska now, specifically looking at the pipeline or phase 1 of the pipeline and moving forward with 8 Star Pipeline LLC ultimately. So as the project enters into the completion phase, which they are approaching very quickly, then they will be looking for equity partners, debt financiers to come in. And the equity portion that Mr. Begich talked about was the option that we reserve through our agreements for 5 to 25%. And that is where the State of Alaska, if it was to become an equity participant, would be then potentially sharing in the overrun risk unless we had preferential rights negotiated with Glenfarm. Okay.

Follow-up. Representative Galvin. Thank you. And so what does HSTAR get if it's not, you know, responsible for the cost overruns? And does it get 25% of the revenue at that point then?

Is that what that is? Yes, sir. Richards. Through the chair, Representative Galvin, again, at the HSTAR Alaska level, what AGDC will receive from the state of— for the state of Alaska are essentially what we describe as developer economics. And that is, as 8Star Alaska has moved forward and developed this project and acquired the permits and acquired the engineering and letting in the contracts, it will then essentially extract from the lower LLCs the ability to receive revenues coming up to help pay— cover some of those costs.

So it will be revenue-generated from the subproject LLCs up through 8STAR Alaska. And if I may follow up—. Representative Galvin. Just to understand that a little bit more, what I was told also was that the LLC pieces have different— or may have a different level of risk associated with them. So it's hard for me to part out then that there's no risk versus there is risk because what we're getting is what we would get from the bottom tier that you're describing, the LLC tiers.

So I'm just— my head can't picture that as much as I'm looking at this picture. It still doesn't reconcile. So if you could paint a little bit more clear picture for me, I'd appreciate it. Through the Chair, Representative Galvin, we have a slide that we didn't include in this packet I would like to be able to present, which will clearly depict the cash flow. I think Mr. Bagish has something to add.

For the record, that was Mr. Richards speaking just now, and we have got Mr. Bagish next. Mr. Chairman, thank you again. Mark Bagish for the record. The simplest—I will try to simplify this even more so. The H* which is 75/25 carried interest, the investment requirement, the risk, zero up there, but they all own 8Store owns 100% of each one of these sub-LLCs.

Let's take the pipeline. Here's what will happen. And I'll probably use some numbers. Again, I'm not going to speak for Glenford because there's elements here that are being developed. 8Store owns 100%, technically right now.

Glenford owns 75% of that pipeline. 8, Uh, AGDC owns 25%, but they have no equity. So they go out and they raise equity. More than likely they'll raise— in every project I've done, You go and raise the 100% equity, but only sell 80% of the company. So you have two ends to the arena.

So let's assume that happens. I'm just giving this as a hypothetical. They've sold 80% for equity to raise the money to build the pipeline. They still retain 20% of carried interest, both of them. No more investment needed on that component.

That component is yours. Now that could shrink to 10%, it could shrink to 5%. Depends on how your equity investors want to get paid back. When that occurs, let's assume that's the model. Mm-hmm.

What will happen is your equity investors, people who put cash in, will get their money back first with some rate of return that's a preferential rate. Once that's paid, then the people who still have the remaining percentage will start getting their share. However that, what they call the waterfall, is developed. But you can't develop that waterfall until you know exactly what your equity investors want. And that's what they're in the process of doing.

So that's why they would differ. Then there are these other items that Frank has mentioned, that the holding company will receive some development fees and so forth. But that just trickles up. The big money is in ownership. That's why it's kind of complicated, because you see two different ones.

And I add to even more complication, if the state says, we want to be an equity investor, Then you will take risk depending on your investment strategy, and that will be negotiated separately and then brought to you all and how you want to do it. So, Galvin? Well, thank you. Clear as mud. I know.

And it's not because I don't understand math, because I do, but I can also understand that it depends on what happens with the bottom tiers and how much comes into that in terms of the state buy-in, right? Yes. So that will change whatever it says when we're risk-free, I think it becomes a little bit different than that. And so I just want to make sure that we are with our eyes wide open, understanding what we're getting into. And that doesn't mean it's a bad thing.

It just means we need to make sure we're clear on it. I very much appreciate it. Thank you for the chance to have that conversation. Mr. Prestidge. Representative Galvin, through the chair, just to, just to be, just to clarify one point, the ultimate structure Could change depending on whether the state wants to invest cash for equity at the project level itself.

But the principle that if the state's current form of ownership will always be 25% of 8STAR, that portion of ownership will never have exposure to cost overruns or liabilities or risk or ever will be required to put another dollar into this project. Great. Thank you. Okay, please proceed with the presentation. Mr. Chairman, Frank Richards for the record.

The committee also wanted to get a look at what the history was in terms of the cost estimate of this project. So we go back to, in time, to 2013 when the producers led by ExxonMobil were looking at a concept selection of what was soon to become the Alaska LNG Project. At that time they published a range of.

The cost from $45 to $65 billion. And that was really based on a fair amount of engineering, but not necessarily at a level that was at the feed or pre-feed level. And it was really a concept-level engineering. So there weren't price quotes. It was more just a good indication of what the cost would be.

And this was— came out through, again, the process where there was a heads of agreement that was prepared and shared with the state on what the ultimately the project agreement was ultimately with those that was held confidential. But that was at a level we call Class 5. So a very low engineering, lower cost level credibility and a significant amount of contingency. When the project then proceeded through what is known as pre-front-end engineering, when you actually go out, you look at the route, you look at the designs of the individual plants, you come up with a concept, beyond concept level, but you actually go out and get some price quotes on materials as well as talk to contractors. In 2016, when the pre-feed level effort was completed under ExxonMobil's leadership, we were at Class 4, and the cost was then estimated to be $44.1 billion.

And at a Class 4, then you've got about a minus 25 plus 30% range of contingency in there. This, this cost estimate was then given to AGDC, and we knew that again, as time passed, that there was going to be some inflation factors, escalation in there. And ultimately, we worked with ExxonMobil and BP again to look at the cost estimate in 2019, and they worked with us diligently to look for ways to reduce that that cost that was in the design. And so some have heard of ExxonMobil gold plating projects. Well, they had thrown some extra costs in there, and we were able to then reduce that cost from $44.1 billion down to $38.7 billion.

And that again was with ExxonMobil and BP. And then we actually had a validation of that effort done by Fluor Corporation in 2020. And then as we move forward, we again, Fluor was looking at this project with us, looking at optimization to be able to come up with ways to be able to keep the cost down or be more efficient. As technologies advance, as construction methodologies advance, as the industry changed from large liquefaction trains to smaller mid-scale liquefaction trains, we were able to then go forward, update the cost estimate again with Fluor, and in particular bringing in Enbridge at the time, who was working with us to validate the cost in the pipeline. So again, North America's largest pipeline company being able to to look into this project, look at the execution, look at the cost, and be able to give us inputs.

And so in 2022, again, a Class 4 estimate, but the cost was then increased to $43.9 billion. And then most recently, the work by Department of Revenue to, to put into their existing model looking at the project, they wanted to escalate it to $2026. So they factored in the CPI adjustments. And raised the cost estimate now to $46.2 billion. And so that's where we sit right now within the state of Alaska cost model as the total cost of the entire project— gas treatment, pipeline, and liquefaction.

Representative Galvin and Bynum. Representative Galvin. Thank you. And I appreciate it, Co-Chair Foster. I have two questions related to this slide.

The first question is on slide 11. You mentioned— Mr. Prestidge mentioned that it was completed to Class 2, and I am assuming that slide 17 and slide 11, maybe when you mentioned Class 2, is that the same thing as this where it says estimated class on the cost estimate? And if so, would you just elaborate a little bit on what that means? I— what I took from your presentation on slide 11 is that means that you're very much more solid in terms of being able to attract investors and buyers. But I wanted you to please elaborate what these classes mean.

Mr. Richards, through the chair, Representative Galvin, I'll take an initial step at that and then ask Adam to pitch in. But as you see on this slide, we're talking about Class 4 estimate for the entire project. Okay. And then on the slide that you referenced, it was the— Adam, I believe, was talking about the Phase 1 pipeline cost estimate, bringing that up to a Class 2 level.

Adam? Mr. Prestige? Representative Galvin, through the Chair, agree with Mr. Richards. That's exactly right. And what that does mean is that the Class 2 is at a higher level of detail and certainty and does put the project at a very advanced, higher certainty level of engineering.

Representative Gelman. Thank you, Mr. Co-chair. Part of my— I guess now I'm thinking about how important it is that we do understand this overview because we've heard terminology around Phase 1, Phase 2, and I do appreciate that this committee hasn't chewed on that very much. So I want to comment on that, given that what we're hearing is one portion of it is very, very solid, uh, and Class 4 sounds like it's a little bit less solid. And so for that next phase perhaps, um, and so I guess a part of me wonders if we should be focusing then more on Phase 1, which I think that's what the property tax is doing, but I want to make sure I'm understanding all of this also in the right context.

I don't know if it makes sense for us to hear commentary about that from you, but because we are looking at this big of a project that seems to have segments, if you could help direct us to understand what we should be focusing more on, if that's the case. And I know that I've heard from colleagues saying, oh, but we also want to know the bigger piece, because if we're making decisions around investment then that's also critical at some point. Comments by Mr. Begich. Mr. Co-chair and through representative, they're all connected. I know we— but we're trying to show Phase 1 has a much— because it's an immediate need.

No matter what you do on Phase 2, if you don't have Phase 1, it's irrelevant. But you need Phase 2 over the long haul to create a price break or lower price for, uh, the Alaska residents because that will create volume. So it's kind of a double. Plus that's also where the state reaps the greatest financial benefit through taxes and all the other pieces of the puzzle. So yes, the pipe is much more defined, level 2.

That's given them capacity to go and, uh, deal with financing in a much more aggressive way, in a way that gives the people who want to invest a less I don't want to say nothing's— everything has risk, but less risk, I should say. But while doing that, and Adam can speak to this, they're still moving forward on the other piece because they go in tandem. Plus, the FERC license requires these to be one project at the end of the day. So everything kind of moves, but one comes before the first, before this Phase 2. And this was a decision, as Frank said, back in 2022 approximately, It was just such a big project, no one could get their heads around it.

So when you split it, it really makes sense. You get the pipe done, it benefits Alaska, you get gas to Alaskans at very comparable prices to export or import because the conditions have changed even since 2022. But it also sets the stage while they're moving on the pipeline to get phase 2 work to be done. And maybe Adam can talk about those 2 stages because that is a very It's not like we finish one and then go to the next. They're moving in tandem, but just a little bit off, if that makes sense.

Representative Galvin. Thank you. Appreciate that. Mr. Richards, I understand you're not going to tell us the current cost estimate. I see it's looking at $46.2 billion, and I know there's been confusion about comments made that the cost estimate may have actually gone down from $46.2 billion.

$46 Billion. Can you at least confirm whether the current cost estimate is higher or lower than $46.2 billion? Mr. Richards. Through the chair, Representative Galvin, Frank Richards for the record. Again, what I represented here on this slide is the latest information that we have in regards to an updated cost estimate at the Class 4 level for the entire project.

So the last time it was actually looked at and brought up to speed by engineers looking at the impacts and the market was in 2022. And what, what Department of Revenue has represented now is an escalation looking at the CPI factors and escalating it from that 43.9 to 46.2 number. Now, your original question was around pipeline and the Class 2 level. And I think Adam described it, that, that, that is work effort that has been done that is based on updated cost estimates from contractors and price quotes. So I think, again, that's for Phase 1.

So I know that it's.

Confusing because we talk about this, this gigantic project called Alaska LNG, and now we've tried to phase it. But critically, Phase 1 is around getting gas to Alaskans through a pipeline. And this oil and gas property tax is an issue that we've— AGDC has been talking to the legislature now since really 2022 timeframe where we had outside consultants representing that the oil and gas property taxes within Alaska are an order of magnitude higher than other jurisdictions. So we tried to raise the flag. This is something that we must address.

And when we do get to a project, it is going to be something critical to be able to address as we move forward. So that's why the bills that you have in front of you are of such critical nature, is that the economics of this project are very thin, meaning it— because it is so large, because it is so complex, because it is a very competitive commodity, we have to make sure that Alaska is positioned in a, in a way that makes us economic to move forward and provides gas to Alaskans at a lower cost. And ultimately, that phasing will get us to the lowest cost that we will see for the next generations. Representative Galvin. Thank you, Representative Foster.

Appreciate it. So thank you for that. And when you talk about lowest cost, I can't help it but to share with you what I've heard before. Our chance to see this in this committee. What I heard was one cost from the executive branch, a different cost from other places, and completely different costs.

And so, I mean, to, to Alaskans, I've heard $23, I've heard $4.50, I've heard $6. And so my concern there is that I haven't heard that in this presentation at all. And it would be very helpful to us if we're going to make a really important decision, and we should make it so that this can continue, this project needs to continue, if we could see that. What will we go home and tell our constituents? Here's the deal that we got for our heating bills.

And that's really important for us to have. So I'm just going to put that to you. I agree with Co-chair Foster that as much as these conversations are important, we must have something to go home and tell our constituents. And I think it's going to be a positive story, but we need to have those numbers in this conversation. Thank you.

Mr. Bagich. Mr. Chairman, Mark Bagich for the record. Representative, absolutely. Department of Revenue is down in resources down the hall. They told me they would not be here because they're stuck over there on the Senate side.

And absolutely, there's the heat maps, which we call them, which are very definitive. They tell you ranges. And you can actually estimate off of them just looking at them. You'll be able to say, well, what happens if cost overruns equal X? You can actually see where this is.

And I think it's been fairly consistent on our presentations. I'll look to these two to add if I make a mistake here. We know imports are gonna be expensive, and that's kind of choice B, right? We don't want choice B because it's gonna be, I forget today in the Cook Inland, I think the last contract was around $13, give or take. How much?

$13.50. $13.50, Going up again. If you heard from John Sims at NSTAR, he'll tell you he's estimating another increase coming in the next couple years, which will be dramatic. It is the feeling of this project and the people sitting at this table that The first phase of this project, I want to make clear, because I will say this in another forum, there was confusion because they believed something they heard one time and they made it fact, which was not true. The first phase in the pipeline, if all you do is the pipeline, we're going to be competing against import fuel, which is not going to be cheap.

But when you put more volume into the pipe, you have the LNG, you have the liquefaction plant and the plant, you end up at a much lower rate. Some will go as low as I think $4.56, maybe up to $6, somewhere in that range. I always play it high, but you know, that is an unbelievable rate compared to where we are today and where it's going. And the difference is, and I like to point this out over and over again, you get two choices in this mix. There's not an A, B, and a C. We will do one of two things for the South Central region.

We will import fuel, which means no resources, no value to the state, because all that fuel that you will get taxed on will sit up on the North Slope. You will be subject to foreign ships coming in, and depending on what— who you're buying from that day, if they can provide you the fuel, or like we've seen in the Middle East, 25% of the LNG is now kind of stalled out for the world, or we figure this problem out, which is the pipeline, and be able to compete as aggressively as we can with imports, which still will be, you know, there's no easy step. We're going to have a little pain. But once you get to the next stage, that's where we reap the benefit. And it is not a— to me, it's not a complicated choice.

I get it, there's a lot of material here. As was just—. Frank just laid out the issue on the property tax, and we're going to go to the next slide, which shows you comparables, because you all asked for that. The property tax issue is not new. This has come up every time Frank comes to this legislative body.

I watched it. This is, you know, my years here. I haven't been down here the last 5. I've been working behind the scenes with these guys, and this has come up over and over again, not just under this current administration or consulting reports you've done. Consulting reports they've done.

So we're—. We—. It doesn't matter who— if Glen Farnham wasn't here, we'd be asking for this still, because it doesn't matter who's here. This is a problem piece of the equation, and we have to solve it if we truly believe we want to produce our own gas for our own people, to get our own revenue stream, and also do the best we can to export and finally get value for our product and bring it back home for the benefit of Alaskans. Sorry about that, Mr. Chairman.

I just wanted to—. Because your question is a very good question. The price does matter. And I think there's a great story here that is evolving because we're, you know, 28 committee hearings later, 26, we're bound— someone's bound to hear what we're saying. And you guys have only had, like you said, 72 hours and we're compressing a lot of stuff, but we're trying to get to the core.

I'd like to recognize that we also have with us in the audience Representative Ruffridge as well as Representative Freer. Thanks for joining us here. And let's see here. I've got folks in line. Our Representative Bynum, Hannan, and Josephson.

Representative Bynum. Thank you, Co-Chair Foster. Through the Chair, we had indicated on the previous slide that you said we were at a Class 4 for the overall project. Obviously, we've been talking about Phase 1 as what's important. That's what's in front of us, and nothing happens without Phase 1.

Whether or not Phase 2 happens is irrelevant at this point. I mean, it's important, but it's irrelevant to this discussion. Do we have a publicly available cost estimate for the Class 2 cost estimate that you've done for Phase 1? Mr. Prestige. Represented by them through the chair.

No, we have not made that public at this point. Uh, the reason for that is that many elements of this project are still being being negotiated and finalized in negotiations with various counterparties, as well as the sale of LNG, and revealing, making that information public would put the project at a commercial disadvantage that would ultimately result in a higher cost of the project. Follow-up question. Follow-up. With regard to the Phase 1 Do you have a probabilistic estimate or the probability or confidence of what your cost estimate is?

Do you know what that number is? Mr. Prestidge. Representative Bynum, through the chair, the answer is the same. We haven't made that number public. You don't know what your confidence is in your cost estimate?

Mr. Prestidge. Excuse me. I misunderstood the question. Through the chair, Class 2 estimate. Has a plus or minus, plus 15%, minus 10%.

And so that's your— that's the industry— that's the industry band for a Class 2 cost estimate. Correct. I understand that. But also in megaprojects, we have a probabilistic estimate value that gives you a level of confidence. Is that an 80% confidence, 90% confidence?

And for the record, that was Representative Bynum. Mr. Prestidge? Representative Bynum, if you may, that is a question I would like to take back and speak with my engineering team and respond to you later.

Thank you. Okay. Next up I have Representative Josephson.

Representative Hannan, then Josephson, then Stepp. Representative Hannan. Thank you, Co-Chair Foster. Um, understanding that you can't reveal, uh, your cost estimates for just the phasing, my question is going to go broader, which is when you're looking at equity and seeking equity investments, what percentage of equity investment— so if it was $46.2 billion, are you looking at trying to raise 50% of equity or 100% in equity?

Representative, Representative Hahn, through the chair, this is Adam Prestidge. First point I will make is that this question about project cost when it comes to equity.

Is very different when it comes to the state's opportunity to put cash investment into the project in exchange for equity. The project will be at a point that that exercise of that option for the state occurs in the 6 months after FID when all elements of the project will have been definitively concluded. So financing will have been closed. All contracts— this is speaking for Phase 1— financing will have closed, all contracts will have been executed, and so the cost will be completely final. And as the State makes an evaluation of whether to invest cash into the project at that point, there will be a different and higher level of transparency for— of the cost elements for the project.

The second way I'll answer that question is that typically the typical debt-to-equity structure on a project like this would be around 70% debt, 30% equity, and you could see that having a variation of plus or minus 10%. And for the record, that was Mr. Prestidge, and we'll come back to Representative Hannon, and then we're going to recess to get down to the floor. So Representative Hannon. Thank you, Chair Foster. Mr. Prestidge, I— I was not— I'm looking more broadly than the state's investment of equity.

When you're going out to seek equity investors, are you looking at 30% equity to 70% debt, or 70% equity investors? Mr. Prestidge. Representative Hannan, through the chair, Adam Prestidge. The typical way to structure a debt-to-equity ratio on any project, including a project like Alaska LNG, would be 70% debt, 30% equity. That could have a variation, a range of plus or minus 10%.

That is highly, highly negotiated, but I'm confident we'll end somewhere in that band.

Okay, I'm going to go ahead and recess, and I'll find out how long we might be on the floor, and then we'll let folks know if we're going to be coming back later or not. So with that, we'll— House Finance will be recessed at 4:28 PM.