Alaska Legislature: House Floor Session, 3/30/26, 10:30am

Sa.

Sa. Sa. Sam.

Sa. Sa.

Will the House please come to order?

Will members please indicate their presence by voting?

Will the clerk please tally the board?

36 members present.

With 36 members present,

we have a quorum present to conduct business.

Mr.

Majority Leader.

Mr. Speaker,

may the journal please reflect that Representative Jimmy and Representative Nelson,

David Nelson,

have been previously excused from a call of the House today.

Leading the invocation this morning is Reverend Rebecca Bernard,

Unitarian Universalist minister.

Will members please rise?

Good morning.

With the deepest respect for the religious beliefs of all Alaskans, I invite you into a moment of reflection and prayer.

Spirit of life and love,

infinite mystery that touches all that is,

we offer our gratitude and respect and deep wonder at the marvels of this life on earth.

In this time of generous light and warming sun,

we are especially grateful for signs that the earth is preparing to bloom anew.

We know that we are held in the reliable rhythm of the seasons turning and returning,

and for this we give our thanks.

On this Monday morning,

we pray for this respected body as it prepares to begin a fresh week of deliberating on behalf of the people and state of Alaska.

May this work be guided by caring and compassionate hearts,

by open and curious minds,

and by a search for solutions to our beloved state's challenges that will uplift each one of us and foster the thriving of our whole Alaska community.

This is sacred work and we pray that it will be nourished by the appreciation and attention of all whom it serves.

In the name of all that is holy,

we pray.

Amen.

May it be so.

Representative Eishide,

will you please lead us in the Pledge of Allegiance?

I pledge allegiance to the flag of the United States of America and to the republic for which it stands,

one nation under God,

indivisible, with liberty and justice for all.

Representative Stork.

Thank you, Mr.

Speaker. I move and ask unanimous consent that the prayer be spread across the journal.

Hearing no objection,

the prayer will be spread across the journal.

Will the clerk please certify the journal for the previous legislative days?

I certify as to the correctness of the journal for the 67th through the 69th legislative days.

Mr.

Majority Leader.

Mr. Speaker, I move and ask unanimous consent that the Journal of the previous days be approved as certified by the Chief Clerk.

Hearing no objection,

the journal stands approved.

Are the guests for introduction this morning?

Representative McCabe.

Thank you, Mr.

Speaker,

and good morning. In the Peratrovich Gallery behind me is the superintendent of the Denali Borough School District,

Mr. Dan Polta.

The Denali School...

District is one of my favorite places.

It's home to the Tri-Valley Warriors,

and significant is Mr.

Polta is retiring.

June 30th and probably will not be here again so this may be his last visit to the Capitol so he thought it would be great to come in here and see how we do our work.

When I asked him what he was going to do after retirement he basically said absolutely nothing so I don't know how you do that but he is going to try.

I hope you'll all stand and give Mr.

Polta a warm welcome.

Thank you for your service,

Superintendent Polta.

Representative Frere.

Good morning, Mr.

Speaker.

I'd like to introduce my staffer, Ayanna Lind,

if she'll please stand in the Taylor Gallery behind me.

You all may recognize her as my front desk and legislative aid,

and this is her second session in the Capitol.

She was able to participate in the Ted Stevens legislative internship this spring semester while also working full-time for my office. This opportunity allowed her to fulfill her credits in her secondary concentration of her interdisciplinary studies.

degree at the University of Alaska Southeast.

When she's not here in the building,

she enjoys traveling to museums she hasn't been to before,

catching her favorite musicians at a show,

ocean dipping with her friends,

or reading a good book at Auk Rec,

weather permitting. If you'll please join me in welcoming Ayanna.

Madame Rules Chair.

Good morning,

Mr.

Speaker,

and thank you.

Today with me I have two constituents from the lovely metropolis of Seward, Alaska.

Justice Bohart is here with his mom Rhonda and his dad Ben.

He lives, excuse me, he is here with his father Ben,

but he lives with his mother Rhonda and his brother Pax as well as his dad.

He loves baseball,

hiking,

and swimming,

all of which he does while wearing a prosthetic because he is missing his left foot.

Justice recently hit a home run after his prosthetic broke mid-game.

He and his dad Ben are here as citizen advocates for HB 272, which provides for improved coverage for their prosthetics. So if you would help me welcome...

Ben, justice is father and justice.

There he comes,

Seward.

Representative Colon.

Thank you, Mr.

Speaker.

I have a constituent here in the Taylor Gallery.

If Sean Siegel could please stand up.

Sean is the Executive Director of the Alaska Dental Society.

Please help me welcome him.

Representative Sadler.

Thank you, Mr. Speaker.

I'd like to have the pleasure of introducing my intern for this session,

the Peratrovich Gallery.

Will Kai Elkins please rise?

He's kind of quiet, but he's staying in the corner.

But Kai is a senior at University of Alaska Fairbanks and will be graduating this spring at the conclusion of his internship here.

Kai grew up in Delta Junction, graduated from Delta Junction High School in 2021 is happening 21st century.

He's a big sports fan,

particularly with football and soccer and basketball.

Kai has made a real big contribution to my staff and office this year.

He has staffed committees.

He has even helped get a bill passed in this house. We have high hopes the other house.

Awesome.

And he has enjoyed gaining insight into and actively participating in Alaska's legislative process.

And if we don't scare him away, I hope he comes back.

Kai Elkins.

Representative Dibert.

Thank you. Good morning, Mr.

Speaker.

I'd like to take a moment to recognize

Someone who has truly made a difference in my office this session,

my legislative intern Emma Solchinski,

who is from the Ted Stevens internship program.

She's in the Pretzsch gallery,

if she could please stand.

Hailing from Homer and currently attending UAF,

Emma brought with them not only a strong work ethic, but also remarkable creative spirit.

An artist with a passion for drawing,

they see the world through a thoughtful and imaginative lens,

and that perspective has been a real asset to our team.

Whether their future leads them to law school or art school,

I have no doubt Emma will excel.

During her time here,

she's contributed meaningfully to our work on House Bill 162,

approaching each task with diligence,

curiosity,

and care.

And beyond their accomplishments,

what truly stands out is Emma's presence.

Emma has been a joy to be around for everyone,

bringing positivity and an energy that has lifted up my entire office.

I'm so grateful to Emma for accepting the position this year.

Please join me in thanking them for their outstanding work and welcoming them to the chamber today.

Representative Himshoot.

Thank you, Mr.

Speaker. Good morning.

I have three folks I'd like to have stand in the Taylor Gallery.

If the folks from Sitka in the Taylor Gallery would please stand. I'll introduce first Deidre Jensen.

She is the superintendent in Sitka School District. She's been with us for at least two years now, maybe three.

She's navigating challenging times with the really remarkable staff there in Sitka.

And I think we're all hoping that she can beat the average three-year tenure of a superintendent in Alaska.

So I'm really happy to have her with us.

And next to Deidre is Betty Richter.

Betty is originally from Utgavic, and she's now living in Sitka,

where she's been teaching since 2004.

She and I worked together for years.

What Betty didn't put on her introduction sheet is that she's also a talented baker,

she's an incomparable mom,

and if she visits your office today,

please know that you are in the presence of an excellent,

excellent educator.

And then finally I'd like to introduce my Ted Stevens intern.

and E.J. Richards.

E.J.

has two amazing hardworking parents back in Sitka,

Jeff and Kat Richards,

and he wants to share his gratitude to his parents for everything that he's been able to do and everything that's ahead for him.

He's a passionate advocate of public education. He's attending UAS Sitka, and he is the only member of his entire family who was actually born in Alaska,

and that includes his younger sister.

So,

EJ's duties include tending the office orchid, whose name is Bob.

Stop by any time if you'd like to meet Bob or EJ.

And I just wanted to also mention,

and this probably fits under announcements,

but we will be celebrating the interns tomorrow night collectively at the governor's house.

So that's why we're introducing all of them today. So please help me welcome Sickens to the capital.

Representative Eischied.

Good morning, Mr.

Speaker.

It's my honor to introduce behind me in the Taylor Gallery Annabelle Slinker.

Annabelle, if you'd please stand up.

Annabelle is a freshman at West Anchorage High School.

There she plays the cornet.

Fun fact,

I also played the cornet in high school and she loves to play golf.

She's here as the ambassador on the Alaska National Guard Council,

and it's an opportunity to support other National Guard kids. The council has become like a special, a second family to her.

So when I asked her what makes her happy.

She said she likes to serve people,

so she is here serving her peers.

Her parents are National Guards people,

and she,

of course, deserves to have a support staff,

so she's here with three supporters, and I'd like those three individuals to stand up when I call their name,

Susie Morrow,

Ashley Shelton, and Octavia Thompson.

Let's give all four of these folks a rousing welcome to the house.

Representative Meares.

Thank you, Mr.

Speaker.

I'm pleased to introduce one of my neighbors from South Muldoon in the Taylor Gallery.

We have Justine Bright.

She moved to Alaska in the spring of 2022 to lead a trail crew in Lake Clark National Park and decided Alaska would be home from then on.

She since worked as a sea kayak guide and nonprofit program coordinator and recently got her EMT license.

She volunteers with the Providence Hospice Program and enjoys exploring wild places in a boat and on foot.

She's here in the Capitol accompanying Justice Ben and Claude in support of House Bill 272 so that the next time Justice is up at bat,

hopefully he's got appropriate equipment that doesn't break on him.

So please help me in welcoming her to the Capitol.

I believe that completes introduction of guests.

Just making sure. Madam Clerk, are there any messages from the governor?

A message dated March 27,

stating on January 22,

2026,

in accordance with Article III,

Sections 26 and 27 of the Alaska Constitution and Alaska Statute 39.05080,

a list of appointees were submitted to the legislature for confirmation. Due to the appointee's resignation,

the following appointee is withdrawn from consideration,

effective

effective immediately, to the Alaska Labor Relations Agency, Tammy Schultz. I have no further messages from the governor this morning.

Are there any messages from the other body?

I have no messages from the other body.

Any communications?

There are no communications this morning, Madam Clerk.

Madam Clerk, are there any reports of standing committees?

The Labor and Commerce Committee reviewed the qualifications of the following.

Daniel Hager as a member of the Board of Barbers and Hairdressers,

Edward Barrington as a member of the Board of Chiropractic Examiners, Michael Sanders as a member of the Dental Board of Dental Examiners, Damian Delzer as a member of the Board of Examiners in Optometry and Jillian Geraghty as a member of the Board of Professional Counselors.

Signing the report,

Representatives Hall,

Co-chair and Representatives

Kara Colom Sadler and David Nelson.

The Judiciary Committee considered House Bill number 298, Legislative Ethics Committee and Proceedings, attached one new zero fiscal note. Signing the report,

due pass, representatives Mina,

Underwood,

Eishide and Chair Grey.

No recommendation,

Costello, Vance and Kopp. The bill has no further referral.

The Labor and Commerce Committee considered House Bill 363,

alcohol sales by patriotic organizations,

recommends it be replaced with committee substitute for House Bill 363,

Military and Veterans Affairs,

with a new title.

Attached one previously published zero fiscal note.

Signing the report due pass,

Representatives Frere,

Carrick,

Sadler,

D. Nelson,

and Co-Chairs Hall and Fields. No recommendation,

Colom. The bill has no further referral.

The Education Committee considered House Bill 376, Expand Early Intervention Services,

recommends it be replaced with committee substitute for House Bill 376, education with the same title,

attached two new fiscal notes,

signing the report do pass representatives Aishai, Deibert, and co-chairs Hemshew and Story.

No recommendation,

Elam, Schwenke,

and Underwood. The bill has a further referral to the Health and Social Services Committee.

The Finance Committee considered Senate Bill number one forty six R_E_A_A_ fund, Mount Edgecumbe Teacher Housing, recommends it be replaced with House Committee substitute for Senate Bill number one forty six finance with a new title change H_C_R_ thirteen attached one previously published fiscal note.

Signing the report do pass, Representatives Bynum, Moore, Galvin, Stapp and co-chairs Josephson, Foster and Seagey. The bill has no further referral and I have no further reports of standing committees.

Committees.

Are there any reports of special committees?

I have no reports of special committees.

Are there any citations or resolutions for introduction?

In memoriam, Roxanne Roxy Lillian Swenson Lee by Representative Hemshute and Senator Stedman,

and House Concurrent Resolution Number 13 by the House Finance Committee,

suspending Rules 24C, 35, 41B, and 42E, Uniform Rules of the Alaska State Legislature,

concerning Senate Bill Number 146,

relating to the regional educational attendance area and small municipal school district fund,

relating to Mount Edgecombe High School and relating to teacher housing.

I have no further citations or resolutions for introduction.

Mr. Majority Leader?

Mr. Speaker, I move and ask unanimous consent that notice and publication requirements be waived and the citation in memoriam Roxanne Roxy Lillian Swenson be made Lillian Swenson Lee be made a special order of business.

Without objection,

Once again,

Mr. Majority Leader.

Mr. Speaker, I move and ask unanimous consent that the House approve the citation.

Hearing no objection,

the citation is approved.

Madam Clerk,

are there any bills for introduction?

I have no bills for introduction this morning,

Mr. Speaker.

This brings us to consideration of the daily calendar.

Madam clerk,

please read the first item on today's calendar.

Household number 117 by the House Special Committee on Fisheries entitled An Act Relating to Commercial Set Gillnet Fishing and Providing for an Effective Date.

The House Special Committee on Fisheries considered the bill attached to new zero fiscal notes. Signing the report do pass representatives Vance, Copp, Himshoot, Elam, McCabe, and Chair Stutes.

No recommendation,

Edgeman. The Resources Committee considered the bill.

Recommends it be replaced with committee substitute for House Bill number 117 Resources with the same title.

Attach two previously published zero fiscal notes and House rules submitted two new zero fiscal notes.

Signing the report due pass, Representatives Colome,

Hall,

Sadler,

Mears,

and Co-Chairs Burke and Dybert,

there's one committee substitute.

Mr. Majority Leader.

Mr. Speaker,

I move and ask unanimous consent that the Resources Committee substitute for House Bill 117 be adopted in lieu of the original bill.

Hearing no objection, the Resources Committee substitute has been adopted.

Madam Clerk, are there any amendments?

I have no amendments Mr.

Speaker.

Mr.

Majority Leader.

Mr. Speaker,

I move and ask unanimous consent that the Resources Committee substitute for House Bill 117 be considered engrossed, advanced to third reading and placed on final passage.

There is an objection.

The spill will be held to the next day's calendar.

Madam Clerk,

will you please read the next item on today's calendar?

House Bill number 239 by Representatives Copp, Fields,

and Galvin,

entitled An Act Relating to Criminally Negligent Homicide Relating to the Duty of an Operator Immediately After an Accident and Providing for an Effective Date.

The Judiciary Committee considered the bill, recommends it be replaced with Committee Substitute for House Bill 239 Judiciary with the same title,

attached for new zero fiscal notes.

Signing the report do pass Representatives Underwood,

Eishide,

Vance,

Kopf and Chair Gray. No recommendation,

Mena,

Amend,

Costello. There is one committee substitute.

Mr. Majority Leader.

Mr.

Majority Leader.

Mr. Speaker, I move and ask unanimous consent that the Judiciary Committee substitute for House Bill 239 be adopted in lieu of the original bill.

Hearing no objection,

Judiciary Committee substitute has been adopted.

Madam Clerk, are there any amendments?

I have no amendments,

Mr.

Speaker.

Mr. Majority Leader?

Mr. Speaker, I move and ask unanimous consent that the Judiciary Committee substitute for House Bill 239 be considered engrossed, advanced to third reading and placed on final passage.

There is an objection. This bill will be held to the next day's calendar.

Madam clerk?

At ease.

At ease.

Sam.

Will the House please come back to order?

Madam Clerk, will you please read the next item on today's calendar?

House Bill number 280 by the House Rules Committee entitled an act relating to the multi-state tax compact relating to apportionment of income to the state relating to highly digitized businesses subject to the Alaska Net Income Tax Act and providing for an effective date.

The Finance Committee considered the bill,

recommends it be replaced with committee substitute for House Bill 280 Finance with a new title,

attached one new fiscal note.

Signing the report due pass,

Representatives Jimmy Galvin,

Hannon,

and Co-Chairs Foster and Schragi do not pass,

Allard,

no recommendation,

Bynum, and Tomachefsky amend,

Stap, Moore,

and Co-Chair Josephson,

there is one committee substitute.

Mr. Majority Leader?

Mr. Speaker,

I move and ask unanimous consent that the Finance Committee substitute for House Bill 280 with the new title be adopted in lieu of the original bill.

Hearing no objection,

the Finance Committee substitute has been adopted.

Madam Clerk,

are there any amendments?

There are amendments being copied.

The House will stand at recess until the amendments have been copied and distributed. At ease.

Sa. It's. It.

Will the House please come back to order.

Under Amendments, Madam Clerk.

Amendment number one by representative staff, beginning page one, line one.

Representative Staff.

Thank you, Mr. Speaker.

I move amendment one.

There's an objection in Representative Staff.

Thank you, Mr.

Speaker.

Amendment 1.

Amendment 1, so,

you know, if you look at the underlying bill,

it's changes in structure and corporate income tax.

What Amendment 1 does,

Mr.

Speaker,

is it looks at our actual corporate income tax structure, and it does two things. First,

it deletes...

Every income tax bracket below $99,000 of net income,

if you actually read the current statute, Mr.

Speaker,

and you do the math, if a corporation,

C-Corporation only makes $25,000,

they're supposed to pay us 2% of that $25,000 in net income.

That is a very tiny,

tiny amount of money that probably cost the Department of Revenue more money to collect than it does to take in.

So just to make it more efficient and less burdensome,

Amendment 1 deletes all the brackets that start on C corporations that make less than $99,000.

I don't know a lot of C corporations that make less than $99,000, but it just gives an example of how antiquated some of the numbers in our tax code are. The second thing, Mr.

Speaker,

it...

slightly reduces the amount of money in the minimum amount of money that a corporation would pay.

So I'll turn your attention to lines 21 on page one through lines eight on page two.

And if you notice, if a corporation currently makes over $148,000, they're supposed to pay a sum of a tax of $3,380 plus 6% of the taxable income over $124,000. What my amendment does is it just reduces that to a minimum of $1,250 and you still keep the plus 6% of the taxable income over $124,000.

And that's what the amendment does, and I'm happy to hear debate and question.

Thank you, Mr. Speaker.

Representative Schrage.

Thank you, Mr. Speaker. I rise in opposition to amendment number one. I think the first part of the amendment I could maybe get behind, reducing the minimum floor for income to ninety nine thousand as opposed to twenty five thousand for corporate income tax. And I'd remind individuals that this is not a personal income tax. We don't have one of those in Alaska. This is for your C corporations and their tax rate. But despite my maybe

partial amenability to the first part of this amendment, I think the idea that we're going to reduce the minimum tax for the larger corporation, excuse me, for C corporations making more than a hundred and twenty four thousand, I think that's problematic. We've talked many times on this floor about some of our state's structural fiscal challenges and the idea that we would reduce the tax rate for those making those C corporations making more than a hundred and twenty four thousand

moves us in the wrong direction.

Additionally, I'd note that I don't see any fiscal modeling or analysis as to what the actual impact of revenues would be through this amendment. The member had an opportunity to offer this amendment in the Finance Committee where we would have had a chance to have done some of that modeling either before or after acceptance of the amendment.

And again, given our fiscal concerns as a state, the lack of fiscal modeling on this amendment and the fact that this would

ultimately, we know, reduce revenue to the State of Alaska, it moves us in the wrong direction, and I cannot support the amendment. Thank you, Mr. Speaker.

Further debate? Representative McCabe.

Thank you, Mr Speaker. Several years ago I was on a committee that this body sort of designed called the Working Fiscal Policy Working Group.

And one of the things we determined in that group was that our corporate taxes were way, way too high. In fact, close to the highest in the nation.

We've had 13 years now of outmigration causing us issues with schools,

causing us many issues in jobs within the state of Alaska.

One of the reasons we have such outmigration is because our corporate income taxes are so high that we can't attract new businesses.

Frankly, we know that more than 90% of all businesses in the United States, and it should be the same in Alaska.

Alaska,

our small businesses,

whether they're C-corporations or not C-corporations. And I think that this amendment goes a long way towards reducing it to the point that maybe,

just maybe, we can attract some new business to Alaska,

which would maybe have some workers that came up here,

maybe their kids would go to school,

which would increase the average daily membership in some of these schools and maybe provide a little bit more funding for the school districts. So.

I suspect that this amendment would be seen as friendly.

I know that it's friendly to some of the national tax policy groups.

some

Once this amendment is in this bill,

it would be seen as a bill that possibly we could all support.

And I would urge you all to support this amendment.

Thank you, Mr. Speaker.

Representative Sadler.

Thank you, Mr. Speaker.

I also speak in favor of this amendment.

I think if we want fiscal diversity,

if we want to encourage more revenue in our state to meet our fiscal challenges,

the way to do that is not to kill the baby in the cradle.

Our tax system should be designed to encourage and not disincentivize business.

What this amendment would do is it would reduce or eliminate,

pardon me, the tax on small businesses and very appropriately gradually increase the tax on those businesses as they get bigger.

bigger.

You know, you grow your way out of fiscal constraints, you cannot tax your way out of them. So if the way to do uh to grow the economy is to use our tax system to encourage growth, this amendment is a good way to do that. So um if you want to be low tax and pro business,

this is the amendment for you.

In wrap-up, representative staff.

Thank you,

Mr.

Speaker.

I'm going to address a few things on the floor.

Let me get the, I'll get the big one out of the way, Mr.

Speaker, on the modeling.

So we did email revenue tax about trying to model this.

They didn't respond.

It's not really uncommon with the debate on this entirety of this bill.

I will say, if you just think about it in practical terms,

Mr.

Speaker.

Current law says if you're a C-corp,

you're going to pay 2% of your net income starting at $25,000.

The reason everyone is an LLC or an S-corp in this state is because that's kind of insane because $25,000 is not a lot of money for a corporation in terms of income.

So the objective would be you delete basically the tax for all these kind of startup.

C corporations that don't really have a lot of income and as they grow their business then they start to graduate in their tax scheme rather than taking something that's super immaterial from them.

I mean,

2% of $25,000, Mr.

Speaker,

it's literally costs the Department of Revenue probably more to collect an audit than they take in at that level.

If you go to the brackets,

Mr.

Speaker,

the co-chair Shragi is right.

You know, we didn't model this amendment in finance, but I don't believe that taking a gross minimum tax,

if you read the way it works, again on page 2, line 6.

The base tax for the highest bracket starts at $10,830, and then it's plus 9.4% of the taxable amount over that income threshold.

So if you just reduce the $10,830 to $8,600,

that's like a $1,500 tax break.

And if you look at those big C-Corps that are paying taxes, that's in the millions because they're being taxed.

being taxed at that 9.6 percent rate so I don't think it would have a effect on the overall fiscal impact of the bill other than if you were paying a hundred million dollars in corporate net income tax you would pay ninety nine point nine million and

8,600.

So I hope people vote yes and we try to do something good and encourage people to have small businesses and startup C corporations.

Thank you, Mr. Speaker.

Thank you for those comments and just a gentle reminder to reference other members by their district number.

It's so easy to do.

about as many times myself on the floor are you ready for the question the question being shall amendment number one pass the body members may proceed to vote

will the clerk please announce will the clerk please lock the roll does any member wish to change his or her vote

Will the clerk please announce the vote?

19 yeas, 19 nays.

By a vote of 19 yeas to 19 nays, Amendment number one has failed to pass the body. Madam Clerk?

Amendment number two by Representative Schwanke beginning page 22, line five.

Representative Schwanke?

I move amendment number two.

There's an objection.

Representative Schwanke?

Yeah, amendment number two is actually very simple.

Yeah.

It just asks that the bill begins with the tax year that starts January 2028 and that the bill takes effect January 2028. And the reason that I wanted to put this amendment forward is because in reviewing the complexity of this House bill,

basically, I'm seeing

There are several components in here that are going to need an awful lot of fleshing out.

And so when we extend the apportionment on new sales,

new types of sales that are not yet.

fully fleshed out. I really think that's going to take a tremendous amount of time.

There's new language in here per broadcaster sales.

It's oddly dated. I'm not entirely sure exactly how that will be implemented.

And then there's a new section in here for financial institutions with zero statutory guidance at all with simply a reference to the multi-state compact as last amended.

in 2015.

So the way that I look at this bill,

I feel like it's already the end of March here.

And by the time this would be completely through the process,

there's no possible way that the regulatory package could be developed in a robust and accurate manner.

So I would ask that we push this back a year.

Thank you.

Thank you, Representative Schrage.

Thank you, Mr. Speaker. I rise in opposition to amendment number two.

This bill originates from a recognition that we currently have C corporations doing business in Alaska who are currently paying no corporate income tax despite the fact that many other C corporations who actually have investments here in Alaska,

they have a physical footprint here in Alaska,

are paying that corporate income tax. That's incredibly unfair.

We have corporations like Hulu and Netflix and other.

There are businesses that have very little physical input imprint here paying nothing to our state contributing nothing to our state They are free riders benefiting off of our people and our wealth while paying nothing and contributing nothing back to the infrastructure and services that they Take some use of benefit from and so the idea that we would push the effective date of this bill back further just extends that free ride for these big mega corporations That's not right to Alaskans. That's less dollars in the door

for education,

for road maintenance,

for industry,

whatever it may be is less resources in the door to the state of Alaska to provide for our people and our industry and our business.

We talk about wanting to be pro-business, wanting to be pro-Alaska, pro-students. This is the wrong direction. I'd also note that while there were some provisions added to the bill related to banking and otherwise,

those provisions provide the Department of Revenue.

Point of order, Representative McCabe.

Thank you, Mr.

Speaker.

Mason's 101.

Please limit your debate to the amendment that is under discussion,

not on the bill itself.

Representative Schrage, I would agree with the point of order to the extent that you could wrap up your comments, please,

and we'll have further extensive opportunities during the debate on the bill.

Yeah, thank you, Mr. Speaker. I think it's important that as we discuss the amendment, we understand the underlying effect on the bill and the intent and its impact on the intent of the bill. I don't think that I've strayed at all from the impact of the amendment and I stand by my prior comments. That notwithstanding, I would just add that these companies were put on notice last year when we had a bill of this very similar nature.

They knew that this was an issue being looked at by the state of Alaska.

And so they have been on notice. The idea that we would push this back to not even.

not impact companies doing business in Alaska this year or next year,

but then the next year and have this go into effect in 2028 is very,

very problematic.

And, man,

it is very disruptive when individuals'

point of order in the middle of remarks,

very problematic, especially when they're unfounded.

Oh,

thank you very much. Sorry for the extra time for me to recollect my thoughts.

I would just add that there were provisions added to the bill that were referenced by the member making this amendment that they have confusion around provisions around banking,

around motion picture,

again brought up by the prior speaker.

Point of order,

Representative McCabe.

Point of order, Mr.

Speaker,

Mason's 101,

we're talking about an effective date here. We're not talking about all this stuff, least of all a point of order that was made in the middle of a speech, which is my right, frankly.

Representative McCabe,

this time I'm not going to rule in your favor because I believe the amendment that is being offered,

amendment number two,

is quite expansive and it does bring into question the underlying impact of the bill itself because it's an effective date extension.

So I'm going to ask Representative Chiragi,

you to please continue and I also ask in terms of...

Not exactly brevity, but in terms of condensing your remarks,

would you please continue?

Thank you, Mr. Speaker.

Very lastly,

I just want to address the comments made by the member making this amendment,

Amendment number two,

that part of the reason for delaying the effective date is they were concerned that businesses would need time to understand and for Department of Revenue to flesh out provisions related to banking,

motion pictures,

and there's another one in there as well that's escaping me.

These are provisions directly pulled from the multi-state tax compact.

fact that many other states have already utilized.

These have been done in consultation with the Department of Revenue to make sure that they understand what those provisions do,

that they are implementable through regulation.

And we have heard from the Department of Revenue that in all instances the answer is yes,

they can address these,

they can do it through regulation,

and that is very clear cut for businesses.

So for many reasons I oppose this amendment.

This bill should go into effect sooner than later so that we can stop the free ride for these mega corporations that are

Is it a profiting off our state and giving nothing back to our people or our industry? Thank you, Mr. Speaker.

Representative Stapp.

Thank you, Mr. Speaker.

I'm going to support my member and their amendment,

although I will say I'm fairly confident that the current effective date is probably adequate not to agree too much with the co-chair from Anchorage. I will take the time to push back a little bit, Mr. Speaker.

I just I don't think it's very fair to categorize companies that are doing business and providing services to Alaska as free free loaders.

We don't have taxes here,

so you could categorize everybody as a free loader.

is a freeloader, Mr. Speaker. But regarding the amend amendment,

you know, there's I there's not any harm I think in giving the Department of Revenue a longer amount of time to make make regulatory decisions.

you

So,

you know, in theory, you would make sure that they would have the adequate amount of time.

On a personal note,

I feel like 2027 is probably an adequate amount of time,

but I'm still going to support the amendment because of err on the side of caution.

Thank you, Mr. Speaker.

Minority Leader Johnson.

Thank you, Mr. Speaker.

I just wanted to support this amendment because I am very comfortable with our member from Glenn Allen being very thorough in our research,

especially in understanding of the departments. And if she's looked at this and talked to people, I'm sure to find out how long it will take to implement this.

I know that she is very thorough.

But I also wanted to rise and say.

Just when did not paying taxes and not paying more taxes make you a freeloaders so I just think that if you want to make sure that I agree with my member from Fairbanks a

yes vote on the amendment

In wrap up, Representative Schwanke.

Thank you, Mr.

Speaker.

That was a very

exciting debate over a very simple change.

I think the only thing disruptive here is to push a bill that is going to have pretty broad effects on how corporations do business in the state of Alaska.

One of the most important things we can do to encourage businesses to come and develop in the state is to have consistent tax structures.

So I would like us to have that.

Opportunity to get it right.

Hope you push the green button. Thank you.

Are you ready for the question? The question being shall amendment number two pass the House. Members may proceed to vote.

Will the clerk please lock the roll?

Does any member wish to change his or her vote?

Will the clerk please announce the vote?

18 yeas, 20 nays.

With the vote of 18 yeas to 20 nays, Amendment No. 2 has failed to pass.

Madam Clerk,

Amendment number three by Representative Gray beginning page 22 following line one.

Representative Gray,

There's an objection.

I move amendment three.

Representative Gray.

Thank you, Mr. Speaker.

I'd like to say up front that as members can tell, this was not drafted by alleged legal.

I got the amendments to alleged legal this morning, and they are still working feverishly to finish them.

But for newer members of the body,

we can do amendments this way as well.

Mr.

Speaker,

permission to read.

Permission granted.

We are standing at the front edge of a new economy,

one driven not by oil,

not by mining,

not by fish,

not by timber,

but by artificial intelligence.

Right now, the largest artificial intelligence companies on earth are making billions,

trillions in projected value by harvesting our data, using public infrastructure and selling their products into every...

Every corner of the world including Alaska and what do we get in return almost nothing no meaningful tax base No fair contribution just extraction this amendment puts a stop to that it says if you were one of these massive AI corporations to be clear one worth more than 500 or doing more than 500 million in global revenue annually So if you're a company doing more than 500 million

in business annually,

then this would apply to you.

And you are making money off of Alaskans,

then you are going to pay your share.

And we're not talking about small players,

we're talking about the biggest companies in the world, and here's how it works.

7.5% on the first million to 5 million they pull out of Alaska,

15% on the next 5 million to 25 million,

and 22.5% on anything above 25 million that they pull out of Alaska.

And we know something very important about taxes.

Decades of research and behavioral economics going back to scholar Richard Taylor shows that taxes shape.

shape behavior.

When you price something,

you influence it.

When you tax something,

you don't just raise revenue,

you influence decision making.

We've seen this with everything from tobacco taxes to carbon pricing,

and now we're applying the same principle to artificial intelligence.

Because AI is not just another industry.

It is energy intensive.

It is data intensive.

And increasingly, it is power intensive in the sense that it shapes economies,

information, and human behavior.

behavior.

So the question before us is simple.

Do we allow that power to grow unchecked or do we ensure that as it grows,

it contributes back to the state and operates within clear responsible boundaries?

This amendment does not shut down innovation.

It does not target small developers or local entrepreneurs.

It simply says if you are one of the largest AI companies in the world and you are generating significant value from Alaska,

then you should give back to Alaska.

This is about fairness.

It's about foresight. And most of all, this is about making sure that as.

As AI shapes the future,

Alaska has a stake in that future.

Thank you, Mr. Speaker.

Representative Stapp.

Thank you, Mr.

Speaker.

I appreciate the member from Umet a lot by bringing this topic up.

I will say this amendment is a doozy, like a doozy, Mr.

Speaker.

It's basically amending the statute that I looked at amending in my previous amendment,

Mr.

Speaker,

but the one thing that you'll notice in the maker's amendment is it says tax in-state gross receipts.

Okay,

so you're basically saying that we're going to add a section to our

corporate income tax that is a gross based tax as opposed to a net based tax. And Mr. Speaker, 7.5% on a million dollars on a gross based tax is a massive tax. Like this is the mother of all taxes. If you look at, if you look at line 16, Mr. Speaker, 22.5% on in-state gross receipts

at

over 25 million.

That's without any cost basis.

So you could probably have like an effective tax rate of like 150%, Mr. Speaker.

And 150% could be more money than you might make in the state in cases anybody was thinking about that math.

So I definitely like the point the member is making regarding AI,

but I just don't believe we want to tax corporations at 150% of what they would

do in Alaska.

Thanks.

Thanks, Representative McCabe.

Thank you, Mr. Speaker.

There are dozens of data centers looking to come to Alaska for one reason or another.

I think that something like this would pretty much kill that opportunity for any of them to either even consider Alaska. Frankly, if you look at big businesses such as smelting or a ore facility in north of Fairbanks,

one of the things that they provide is they use a ton of electricity.

And what that provides is lower rates for the ratepayers in Golden Valley because they do have an anchor customer that's using a ton of electricity. If that anchor customer went away just to meet their expenses,

that electric utility might have to raise the rates on all of the other ratepayers.

One of the things that we are considering or looking at right now is a coal plant in Upper Susitna,

a coal-fired power plant,

I'm sorry.

Could you raise your mic and speak into the mic, please?

Point of order,

Mr. Speaker.

Mason's 101.

You must speak to the amendment before you,

not ancillary topics.

Representative McCabe, I would take the point of order as a friendly reminder to please speak to the amendment at hand.

Representative McCabe, I would take the point

of order

as a friendly reminder to please speak to the amendment at hand.

Thank you.

Thank you, Mr.

Speaker.

I appreciate it. One of the things that is addressed in this amendment is a data center. It's on line 24,

computation data. Permission to read, Mr.

Speaker?

Permission granted.

Computation data processing or model training occurs on infrastructure located within this state.

This entire amendment is about data centers.

It's about large...

AI corporations which are data centers so if you would like me to not describe how the data centers get their power which the maker of the amendment referenced and let that fall under 101 I guess that's your right but it is an issue with data centers that we know that they use power and the maker of the amendment frankly mentioned their power use and as if it was a cost to Alaskans and I merely

merely trying to describe that it is not a cost to Alaskans. The power that can be used for a data center can use can provide benefits to Alaskans just by the mere fact of being an anchor tenant for a new,

possibly new coal-fired power plant in...

In the top of West Assitna.

It's something that we are really looking at.

Our rail belt needs power.

It needs infrastructure to support that power.

So this amendment would kill any chance of data centers coming to Alaska.

Thank you, Mr.

Speaker.

Representative Holland.

Thank you, Mr. Speaker.

I rise in opposition to Amendment 3.

I just want to briefly note that the amendment is seeking to increase the tax rate on businesses that are involved in artificial intelligence services.

And while the use of AI in the last couple of years has become very poignant and we're struggling with many of the manifestations of how it's used,

both beneficial but also in some cases

harmful and I think that debate is healthy and we need to have it I also just wanted to draw us back to recognizing that the use of artificial intelligence has been going on for decades if you look at the definition of artificial intelligence services on page two line two of the amendment you'll notice that it mentions the operation of machine learning

models as well as automated decision systems. This is the core of how we run our businesses,

how we run our industries,

industrial processes.

This definition sweeps up essentially all of the technology that makes our world work the way it does today. And while I acknowledge that the intent of this is probably looking specifically at a couple new businesses in the last couple years,

that are working specifically on generative applications,

large language models.

This is sweeping up many of our established technology businesses across all sectors and I'm afraid this amendment right now really has a breadth of impact on business taxation that I don't think is appropriate despite the concerns of AI.

So I look forward to working on AI.

I look forward to understanding the impacts and the costs and perhaps the tax.

tax rates down the road.

I don't think today this amendment is constrained well enough to reflect the use of artificial intelligence as it's defined in this amendment.

Thank you.

Representative Elo.

Thank you, Mr.

Speaker.

I rise in opposition to this amendment as well.

I would have to agree with the previous speaker.

There are this is very wide.

This isn't just one very narrow specific area.

And I do think that this particular type of amendment would be kind of an example of what we don't want to do when we're looking at updating some of our tax structures.

some of our tax structures.

I would like to be seeing us bring in industries,

so data centers,

technology,

all these various things that we would be able to support from an industry perspective here in Alaska,

but just generic artificial intelligence,

that would be anything except human intelligence.

So where's the rails on this? Are we talking about calculators? I mean like very, very wide, you know, so I just I can't support that. And then also the ripples of killing, I mean really any other industry, as the speaker from Fairbanks pointed out, you know, this is on gross revenue. So yeah, I just

So where's the rails on this?

Are we talking about calculators?

cannot support any of this. Thank you.

Representative Schragge.

Thank you, Mr.

Speaker.

Just very briefly, I oppose amendment number two to talk a little bit about coal-fired power plants.

Just kidding,

I won't. I oppose this amendment not because it's not a good idea or because I don't appreciate the attention that it's bringing to this issue,

but just not being drafted by alleged legal without analysis, I think it's a step too far at this time. Thank you, Mr.

Speaker.

Oh, number three. My apologies.

Amendment number three, I oppose.

Thank you.

Representative Schwanke.

Thank you, Mr. Speaker.

I just wanted to say that 15% or 22.5% of zero is zero.

Representative Ruffridge.

Thank you, Mr. Speaker. I just rise for a question for the maker of the amendment.

I would like to know how this amendment works with the underlying bill.

I believe the underlying bill is taking a look at how we deal with large scale digital businesses in some degree or businesses located outside of the state that are doing business in the state and already applying a tax to them.

Is the intent of Amendment 3 to have an additional tax on top of the tax in the underlying bill?

If so, I tend to agree with the member right behind me on the mother of all taxes.

So I would just like to hear the answer to that question. Thank you.

Representative Kerrick.

Thank you, Mr. Speaker.

Maybe I'm feeling cheeky today,

but I'm going to support this amendment.

I do think the rates in this amendment are very high, so I would hope that that would be looked at a lot further.

This is the first body of referral for this legislation,

so there's opportunity for that.

I did want to note that the tax rates apply to in-state gross receipts. I think that's probably an important clarification,

but you know what, Mr.

Mr. Speaker, it sounds like a heck of a lot of money for education, and I think uh that's kind of the point of the underlying bill as well. So I think it's um

worth potentially supporting the intention of amendment number three, and I'm gonna do that today.

Representative Prox.

Thank you, Mr. Speaker. I am a bit conflicted on this amendment.

I think this would be a cool way to cut the cable on the internet,

which I thoroughly support.

On the other hand, this probably isn't realistic and it, the internet is here, I get it, I don't like it, but there it is.

But this, the points raised,

the companies don't impose that much of a real expense on the state and just in all taxes that we consider that the tax to the, from company's point of view is on the net. And if we raise those taxes too high, we're going to get less.

And so I don't support the amendment because this really isn't a practical way to cut the cable on the Internet.

Thank you, Mr. Speaker.

In wrap-up, Representative Gray.

Thank you, Mr. Speaker.

At the risk of...

Being too honest,

I'll share that I began working on this amendment this morning.

When AI did the bill for me,

I felt its numbers were very conservative, and I asked it to triple its tax rate and lower its thresholds. I've learned from the member of East Fairbanks that these are actually quite high taxes.

I was going to say that I had united the room and opposition,

you know, brought us all together.

But thanks to the member from West Fairbanks, it looks like two of us might be voting yes.

And I will look forward to seeing the board.

Thank you, Mr.

Speaker.

All right.

Are you ready for the question?

The question being shall amendment number three pass the House?

Members may proceed to vote.

Will the clerk please lock the roll?

Does any member wish to change his or her vote?

Will the clerk please announce the vote?

Four yeas, thirty-four nays.

With the vote of four yeas to thirty-four nays.

Amendment number three has failed to pass.

Madam Clerk.

Amendment number four by Representative Gray,

beginning page twenty-two, following line one.

Representative Gray.

I move amendment four.

There's an objection.

Thank you, Mr.

Speaker. Permission to read?

Permission granted.

Again,

Mr.

Speaker, I'll just note for the record that I did this amendment,

my office did this amendment as quickly as possible.

Ledger legal is working as fast as possible but does not have it completed.

We are used to thinking about artificial intelligence as helpful,

as an important efficiency,

as a useful adjunct to industry and government, and even as a convenience in our everyday lives,

helping us plan our meals,

our workouts,

and asking it what a good family movie is,

which I do quite often.

But a new large-scale study from King's College London,

published February 26,

2026, so less than a month ago,

forces us to confront a very different reality.

Researchers placed advanced AI systems into simulated geopolitical crises,

situations designed to mirror the kinds of tensions that in the real world have brought humanity to the brink of nuclear war.

What happened?

In 95% of those scenarios,

the AI escalated to nuclear threats or use.

Not once,

not once did an AI model choose to surrender or de-escalate.

And perhaps most troubling of all, these systems did not treat nuclear weapons as a last resort.

They treated them as just another strategic option.

No fear,

no hesitation,

no human instinct for survival.

Mr. Speaker, for 80 years the world has avoided nuclear catastrophe,

not because of perfect systems, but because of human restraint,

because of judgment,

hesitation,

and the weight of moral consequence.

But these systems do not share that restraint.

They optimize,

they calculate,

and under pressure they escalate.

This is not science fiction.

Let me be clear.

This amendment does not attempt to regulate federal nuclear policy.

It does not interfere with national defense.

What it does is simple, and it is prudent.

It draws a clear line in Alaska that artificial intelligence,

whether acting on its own or directed by people,

will not be used here to design nuclear weapons,

control nuclear systems,

or interact...

act with nuclear command infrastructure.

Because if we've learned anything from this research, it is this.

We are not ready to trust machines with the most irreversible decisions that humanity can make.

In the new documentary,

The AI Doc,

ethicist Tristan Harris recounts hearing from insiders,

these are AI experts,

that,

quote,

they do not expect their children to make it to high school,

end quote.

We should not stand idly on the sidelines and wait and see if they are right.

We must do something.

This amendment is not anti-technology.

It is a basic risk management at the highest possible stakes.

When the cost of being wrong is not a system crash,

not a financial loss,

but a nuclear event,

then caution is not optional.

It is our responsibility.

I urge you to support amendment four.

Representative Stapp.

Thank you, Mr. Speaker.

Again,

Again.

actually,

I really like this. I think we should have this conversation, although I'm just going to briefly point out we're trying to shove AI regulation into the corporate income tax code, so I'm not quite certain you could do that in that statute,

but I will say I'm going to not support the amendment,

Mr.

Speaker,

and I would like an answer from the maker regarding page 2, line 26 and onward.

I definitely don't want to be in favor of Skynet, Mr. Speaker. I have seen the Terminator movies and those typically end badly, so I don't really want the AI being in control of nuclear weapons. But I'm curious if the civil penalty and injunction from the Attorney General is going to deter them, you know.

I mean,

I'm glad we're going to file them for each violation,

Mr. Speaker, but I got to feel like you only go through nuclear annihilation one time and multiple penalties or multi-day breaches of that are probably not going to work out, but I would actually like to see this in a bill.

I think it's a great thing for the judiciary chair to be able to bring up and start having conversations about,

although I guess my main objection would be.

The multi-day occurrences and violations,

Mr. Speaker, I think you probably only get one bite at the nuclear annihilation.

Thanks.

Representative McCabe.

Thank you, Mr. Speaker. I actually rise to a question.

And I'm kind of bummed that the member from Fairbanks stole my Skynet reference,

but maybe I could talk about John Connor without getting a point of order. I'm actually kind of curious about...

On line 20, page, second page, I guess the pages aren't numbered,

but I think it's the second page.

It says nuclear power facility in the definitions, and I'm wondering why that's in there. I can't find it in the verbiage of the amendment anywhere.

So would this just having merely,

is this intended to shut down the micronukes, which obviously would have to be that we are another power plant coming to Alaska that we are.

hoping to establish some small micro grids with these little suitcase or what do they call them small micro nuclear reactor SMRs and they would probably be tied to the internet and tied to artificial intelligence because that's how they plan to control them so with this with this having the definition in there create issues for them I guess that's a question thank you

Representative St. Clair.

Thank you, Mr. Speaker.

I will make a reference to war games with Matthew Broderick, in which artificial intelligence was used in that movie.

However,

I rise to two questions for the maker of this amendment.

One, will this impact...

Is it video games? Is that impacted by this?

And number two, on page two, line 10,

it defines artificial intelligence, which as a member brought up earlier,

could actually be a calculator.

Thank you, Mr. Speaker.

Representative Sadler.

Thank you, Mr. Speaker.

This amendment obviously touches on an issue that is highly complex and contentious and consequential.

We often hear on this floor that amendments were brought up on floor amendments to bills that are good ideas but deserve to have them fully fleshed out and go through the legislative deliberate process in committee.

I think this is definitely an idea that fits that bill and we should probably go back in the evidence. We can have a thoroughly baked measure before us at the appropriate time.

Time. Thank you.

And wrap up, Representative Gray.

Thank you, Mr. Speaker.

I'll go in reverse order.

If a calculator is leading to nuclear annihilation, we need to shut the calculator down.

As far as the questions about nuclear power plants,

what I didn't want was for AI and some attempt to...

self-destruct to sort of do little mini Chernobyl's all over the place. I was trying to rein in AI's ability to somehow weaponize even many nuclear power plants.

And it may be very funny because other people might be nuclear experts,

which I'm not,

but I didn't want to unintentionally allow AI to create mini Chernobyl's all over Alaska.

And then the final question about how does this go into this bill to the member from East Fairbanks.

Ledge legal has the same question.

Brief it is.

Sam.